Two banking giants forecast year-end interest rates and inflation: Here are the predictions
Following the Central Bank's inflation report, Goldman Sachs and Citi shared their interest rate and inflation expectations. While Goldman Sachs made a positive statement, Citi pointed to 2025.
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Goldman Sachs economists Başak Edizgil and Clemens Grafe, in a note written after the Central Bank of the Republic of Türkiye's (TCMB) 3rd inflation report of the year, noted that the bank did not change its year-end inflation forecasts for 2024, 2025, and 2026. The report projects that inflation will fall to 36 percent by the end of the year, while noting that risks remain on the upside.
The statement included the following: "There were downside surprises in inflation in June and July. We expect price pressures to slow sharply for the remainder of the year, along with the slowdown in economic activity and the improvement in household inflation expectations."
INTEREST RATE FORECAST FROM CITI
Citi analysts Gültekin Işıklar and İlker Domaç also pointed out that the TCMB's inflation forecasts remained unchanged, noting that the bank expects strong disinflation in 2025.
According to the report in Dünya, the analysts predicted that the TCMB would not make any changes to interest rates until November, while announcing that their year-end policy rate expectation is 45 percent.
Central Bank of the Republic of Türkiye Governor Fatih Karahan, at the 3rd Inflation Report meeting of the year, stated that they did not change their year-end inflation forecasts for 2024, 2025, and 2026, saying, "We project that inflation will decline to 38 percent by the end of 2024, and we have maintained our 2025 and 2026 forecasts at 14 percent and 9 percent, respectively." Karahan emphasized that they would resolutely maintain the tight stance in monetary policy until price stability is achieved.