Turkey’s central bank expects annual inflation to be around 62% at the end of this year, according to Bloomberg and Reuters, cited by Agerpres.

In addition, the institution will continue to tighten monetary policy as much as necessary, gradually, and expects a process of declining inflation in 2024.

Last week, Turkey’s central bank decided to raise the key rate more than analysts expected, the first sign that officials are taking more aggressive steps to reduce inflation.

At the third monetary policy meeting chaired by the new governor, Hafiz Gaye Erkan, the Central Bank of Turkey decided to increase the base interest rate from 17.5% to 25%. Most economists expected an increase of up to 20%.

In July, the inflation rate was 47.83%, and in August it will exceed 55%.

Turkey’s economy grew a better-than-expected 3.8% year-on-year in the second quarter of 2023 (from 3.9% in the first three months of 2023) on the back of strong household spending, but analysts expect a slowdown by the end of the year amid a decline the effect of stimulus measures and interest rate increases.

Compared to the first quarter of 2023, Turkey’s GDP grew by 3.5% in April-June 2023, also beating estimates. Analysts expect growth of 2.9% this year as a whole.