End-year inflation expectations fell to 9.02% in December from 9.22% a month ago, the Central Bank’s monthly survey of economists showed on December 19.
12-month ahead inflation expectations were revised to 7.21% from 7.5% in the previous survey. The participants of the survey expect consumer prices to increase 0.31% m/m in December while their forecast for the January inflation stands at 0.8% m/m. The government’s inflation forecasts for 2014 and 2015 are 9.4% and 6.3%, respectively. If the oil prices remain at their current favourable levels inflation should come down next year.
Economists also revised their current account (CA) deficit expectations for 2014 to $44.6bn from $46.7bn. The 2015 CA deficit is now seen at $44.7bn, down from $50bn in the previous survey. The government expects the CA shortfall to shrink to $46bn (5.7% of GDP) this year from $65.1bn (7.9% of GDP). The falling oil prices and slower growth should reduce the CA deficit next year.
The Turkish economy is expected to grow 3% this year (3.2% in November survey) and 3.5% next year (unchanged from the November survey).
The IMF forecasts GDP growth of 3% for this year and next while the OECD foresees the Turkish economy expanding by 3% this year and 3.2% in 2016. The government’s GDP growth forecasts are more optimistic as 3.3% for next year and 4% for 2016.
| Central Bank Expectations Survey | ||||
| Sep | Oct | Nov | Dec | |
| End-Year Inflation (%) | 8.89 | 9.16 | 9.22 | 9.02 |
| 12-Month Ahead Inflation (%) | 7.44 | 7.54 | 7.50 | 7.21 |
| End-Year Current Account Deficit (USD bn) | -48.4 | -47.8 | -46.7 | -44.6 |
| End-Year GDP Growth (%) | 3.2 | 3.2 | 3.2 | 3.0 |
| 2015 GDP Growth (%) | 3.7 | 3.6 | 3.5 | 3.5 |
| Source: tcmb | ||||
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