Bank of America (BofA) Global Research shared its updated outlook on Turkey’s economy. The bank raised its year-end 2024 Consumer Price Index (CPI) forecast from 42.2% to 43.3%, while maintaining its 2025 year-end CPI forecast at 25%.
In the report, BofA stated that the inflation data from September did not change their base scenario for the first interest rate cut, which they expect to occur in December 2024. If there are no surprises in the data, the analysts anticipate a 200-250 basis point rate cut in December 2024. However, if the risk scenario materializes, the rate cut could be postponed from November 2024 to January 2025.
BofA analysts also noted that if inflation data continues to disappoint, the first interest rate cut might happen in the first quarter of 2025.
The bank forecasts that the Central Bank of the Republic of Turkey (CBRT) will lower its policy rate to around 30% in 2025.
