JPMorgan, one of America’s largest banks, has raised its inflation and interest rate forecasts for Turkey following the surge in the exchange rate after the arrest warrant issued for Ekrem İmamoğlu.
An economist from JPMorgan revised the inflation forecast in a report shared after İmamoğlu’s arrest. The bank stated that the disinflation process would continue at a slower pace and increased its year-end inflation forecast for 2025 from 27.2% to 29.5%. The March inflation forecast was also revised upward from 2.3% to 3.2%.
The report predicts that the Central Bank of Turkey (CBRT) will reduce interest rates by 150 basis points at each meeting starting in April, raising the year-end interest rate forecast from 30% to 35%.
The report also highlighted foreign investors’ positions in Turkey: $35 billion in carry trade positions, $19.6 billion in foreign holdings of Turkish government bonds, and 37% foreign ownership in stocks, totaling $34.5 billion.
