Higher-than-expected inflation data for August published on Monday prompted JPMorgan to revise its year-end inflation forecast to 65 per cent from 62 per cent with the annual rate now expected to peak at 73 per cent in May 2024, according to the Wall Street bank.
The bank also said it saw upside risks to its year-end policy rate forecast, which it kept at 35 per cent, but predicted that the central bank’s key interest rate would end next year at 45 per cent rather than previous estimates of 40 per cent.
“August CPI suggests protracted disinflation process,” JPMorgan’s Fatih Akcelik said in a note to clients.
“Since we expect persistent inflation, we forecast more monetary tightening to address inflationary pressures after March 2024 municipal elections.”
Turkey’s annual inflation rate surged to a higher-than-expected 58.94 per cent in August, official data showed earlier on Monday, rising for a second month after a steep fall in the lira currency and recent tax increases.