Turkey’s annual inflation will exceed 40% in the first quarter of 2022 (Q1) and remain at the same level for a large part of the year, according to the U.S.-based multinational investment bank Goldman Sachs.
“We estimate the inflation will exceed 40% in Q1 and remain at the same level in Turkey for a large part of the year after the non-seasonally adjusted monthly inflation surprisingly rose to 13.6%,” the institution noted.
Goldman Sachs also said the uncertainty in inflation estimations is extremely high and upward considering the volatility in TRY.
The investment bank maintains its opinion that the policy rate of 14% which is supported by administrative and partial fiscal measures, will not achieve to balance TRY in a sustainable manner.
“We estimate the interest rates to sharply increase in the second quarter, although we don’t have a strong belief that this happens considering the fact that officials maintain extraordinary policy choices to stabilize TRY,” the statement read.