Reuters: Inflation in Turkey to rise to 42.7% by year-end

“After being re-elected last May, Erdogan had appointed a new cabinet and central bank management to address depleted foreign exchange reserves and rising inflation expectations. Foreign investors had begun buying Turkish bonds in late last year to take advantage of interest rate hikes.

However, in the past week, Erdogan is said to have set aside his determination to combat inflation as the AK Party sought to regain control of Istanbul and other major cities from the opposition in the upcoming elections.

Gizem Öztok Altınsaç, chief economist of Turkey’s largest business group TÜSİAD, said that annual inflation would decrease after May due to base effects but would not decrease as much as the Central Bank projected due to strong domestic demand.”

According to a Reuters poll, annual inflation is expected to rise to 42.7% by the end of the year, higher than the Central Bank’s forecast.