Expectations for Turkey's end-2018 inflation rate rose to 10.07% in April from 9.49% in March, the central bank’s regular survey of businesses and analysts showed on April 19.
The central bank’s official inflation target for 2018 is 5%. The central bank in January raised its end-2018 consumer price inflation forecast to 7.9% from the previous estimate of 7%.
Turkey’s inflation jumped into the double digits in February 2017. Since then the rate has only once moved back into the single digits, with that occurrence recorded in July last year. The peak point was November’s 12.98%. Since then there has been a slow descent to the latest figure of 10.23%.
Respondents in the central bank survey forecast that GDP growth will be 4.7% this year and 4.5% in 2019.
The Organisation for Economic Co-operation and Development (OECD) on March 13 raised its forecast for Turkish GDP in 2018 by 0.4pp, upgrading the forecast to 5.3%.
On April 17, the International Monetary Fund (IMF) announced in its latest edition of the World Economic Outlook that it had revised its 2018 GDP growth forecast for Turkey upwards by 0.9pp to 4.4%.
A tight monetary stance would be required to keep inflation expectations anchored, the IMF said, projecting inflation in Turkey would come in at 11.4% in 2018.
Looking at expectations for Turkey’s current account balance as a percentage of GDP, the IMF assessed that it was -5.5% last year and would be -5.4% in 2018.
According to the central bank survey, Turkey’s end-2018 current account deficit expectations increased to $50.8bn in April from $48.2bn in March.
Survey respondents also said that they expected the USD-TRY rate to be 4.2220 at the end of this year, lower than the 4.0975 anticipated in the March survey.