HSBC revises inflation forecast upward following interest rate decision
HSBC has raised its year-end 2024 inflation forecast for Turkey from 47.9 percent to 49.4 percent. The bank had also recently assessed that an interest rate cut could occur as early as the first quarter of 2025.
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HSBC has revised its inflation forecast for Turkey.
According to a report by Bloomberg HT, based on a note dated March 14 prepared by HSBC CEEMEA Economist Melis Metiner, the bank raised its year-end 2024 inflation forecast from 47.9 percent to 49.4 percent. The inflation expectation for 2025 remained at 29 percent.
In the latest inflation report from the Central Bank of the Republic of Turkey (TCMB), the year-end 2024 expectation was set at 36 percent.
INTEREST RATE ASSESSMENT
While maintaining its expectation for the 2024 policy rate at 45 percent, HSBC also drew attention to the possibility of an increase. The bank stated that, considering the inflation forecasts, there is room for interest rate cuts only in the first quarter of 2025.
Predicting that a soft landing in the economy will remain a priority, HSBC stated, "This means that imbalances will correct slowly. Further tightening would help cool the economy more quickly, but we continue to expect a more gradual approach."