Turkey’s Central Bank raises its year-end inflation forecast to 23.2 percent

The Central Bank of the Republic of Turkey (CBRT) has raised its year-end inflation forecast from 11.8 percent to 23.2 percent. The CBRT also raised its inflation forecast for the end of 2023 from 7 percent to 8.2 percent.

Shahap KAVCIOGLU, President of the Central Bank of the Republic of Turkey (CBRT), announced at the “Inflation Report 2022-I Information Meeting” that the year-end inflation forecast had been updated. Kavcıoğlu said that the year-end inflation forecast for 2022 had been increased from 11.8 percent to 23.2 percent with an update of 11.4 percentage points. The Inflation Report 2022-I information meeting was held at the Central Bank Administrative Center.

The governor said “Compared to the previous reporting period Turkish lira-denominated import prices increased the inflation forecast update by 4.2 points, while 2.5 points came from the increase in food prices” and added following.

Inflation forecast for end of 2023 increased from 7 percent to 8.2 percent

“On the other hand, administered prices, largely alcohol-tobacco and electricity and natural gas prices, contributed to year-end inflation forecast with 3 points. In addition, unit labor costs had an upward effect of 2.0 percentage points due to the minimum wage increase set for 2022.

Kavcioglu said that the forecast for inflation at the end of the 2023 year has also been increased from 7 percent to 8.2 percent. Kavcıoğlu “The effects of the update in the initial conditions on the main trend of inflation increased the 2023 year-end inflation forecast by 0.8 percentage points. On the other hand, the update to the food inflation assumption increased the forecast by 0.1 percentage points. Import prices in Turkish lira contributed to the forecast by 0.5 percentage points in an upward direction, while updates in the output deficit affected it by 0.2 percentage points in a downward direction.”