Goldman Sachs: Inflation exceeds 40 percent in Turkey

Goldman Sachs: Inflation exceeds 40 percent in Turkey

Goldman Sachs expects inflation in Turkey to rise above 40 percent in the first quarter.

Goldman Sachs estimated that inflation in Turkey will exceed 40 percent in the first quarter of the year and will remain at this level for most of the year.

“We expect inflation in Turkey to exceed 40 percent in the first quarter and remain at that level for most of the year, with monthly unadjusted monthly inflation surprisingly rising to 13.6 percent,” Goldman Sachs said in a note to its customers.

In the Goldman Sachs note, it was stated, “Considering the volatility in the TL, the uncertainty in inflation forecasts is unusually high and upwards. We maintain our view that the policy rate of 14 percent, supported by administrative and partial fiscal measures, will not be successful in balancing the TL in a sustainable manner.”

The note also said, “Although we do not have a strong belief that this will happen, given that the authorities continue with the extraordinary policy choices they have chosen to stabilize the TL, our projections are that interest rates will rise sharply in the second quarter.”