End-year CPI inflation expectations dropped to 7.31% in December from 7.71% in November, the Central Bank of Turkey’s monthly survey showed on Friday.
12-month ahead inflation expectations remained unchanged at 6.74% but 24-month ahead inflation forecast rose to 6.37% from 6.28%.
Consumer prices are expected to increase 0.42% m/m in November, according to the survey. November inflation expectation was a lower 0.36% m/m in the previous survey. January 2014 CPI inflation is seen at 0.68% m/m.
Consumer prices rose 0.01% m/m in November, bringing annual CPI inflation rate to 7.32% from 7.71% in October. The official inflation target for 2013 is 5%. In October, the Central Bank raised its end-2013 inflation forecast to 6.8% from a previous 6.2% and end-2014 forecast to 5.3% from a previous 5% due to exchange rate developments and oil prices.
Participants of the Central Bank’s survey revised their end-year current account (CA) deficit expectations to USD 59.8bn from USD 59.1bn in the previous survey. CA deficit expectations for 2014 were raised to USD 60.2bn from USD 60.1bn.
CA deficit widened 145% y/y to USD 2.89bn in October (market consensus forecast: USD 2.9bn) but fell from the CA shortfall of USD 3.4bn a month ago.
GDP growth forecast for 2013 rose to 3.7% in December from 3.5% in the previous survey. Participants of the survey also raised their GDP growth forecasts for 2014 to 3.9% from 3.8%. The government cut its 2013 GDP growth estimate to 3.6% from 4% and revised down its growth forecast for next year to 4% from 5%.
The Turkish economy grew 4.4% y/y in Q3 (market consensus forecast: 4.05%) after expanding 4.5% y/y in the previous quarter. On a seasonally & calendar adjusted basis, GDP grew 0.9% q/q in the third quarter. Turkey’s GDP, which grew 2.2% last year, expanded 4% y/y in the first nine months of the year.
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