Mahfi Eğilmez reveals inflation forecast: 'Miracles are needed'

I am frequently asked about my year-end inflation forecast. First, I weigh in my mind which inflation rate I should base my forecast on: the inflation announced by TUIK or the inflation we actually experience? Which one should I take as the basis for my forecast? Ultimately, each time, I conclude that it is correct to base my forecast on TUIK data—which is accepted internationally even if it does not reflect the reality—and I make my forecast accordingly.

The table below is a simple table showing my calculation, which serves as the basis for my estimate according to the data released by TURKSTAT. In this table, the data up to August (the yellow-shaded area) are TURKSTAT's official data. The data in the yellow-shaded area show the index numbers (CPI Index 1 and CPI Index 2 columns) that emerge according to the monthly CPI increase assumptions (Monthly CPI 1 and Monthly CPI 2 columns) and the inflation estimates calculated based on these (12-Month CPI 1 and 12-Month CPI 2 columns).

(Relevant table)

If the monthly CPI rates in the yellow-highlighted area of the column titled Monthly CPI 1 are realized, it means that year-end inflation will reach 44.26 percent. For the Central Bank's year-end forecast of 38 percent to be realized, the average monthly inflation rates must remain at 1.5 percent (Monthly CPI 2 column). Considering that the average monthly inflation rate for the past 20 months has been 3.92 percent, miracles are required for the Central Bank's 38 percent year-end forecast to hold true.

Even 44.6 percent seems like a difficult target.

Then there are the real-life inflation rates, which you shouldn't ask about and I shouldn't even mention.