Turkey’s inflation rate has continued to increase with figures released on December 4 indicating that the country’s economy is still stabilising after a series of significant interest rate hikes.
The rate rose from 61.36 percent in October to 61.98 percent last month, with the pace of consumer price increases slowing after six months of interest rate increases that raised borrowing costs from 8.5 percent to 40 percent.
Analysts meanwhile predict that Turkey’s central bank will raise interest rates by 2.5 percentage points at its next policy meeting on December 21.
The latest data is likely to be welcomed at the central bank as signs inflation is softening, according to some analysts.
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Liam Peach of Capital Economics told Yahoo News: “The central bank will welcome these figures as evidence that demand is cooling and inflation pressures continue to soften,
“However, bringing inflation down to much lower levels will require monetary policy to remain tight for a prolonged period and we expect the central bank to leave interest rates unchanged throughout 2024.”
Last month, Standard & Poor’s upgraded Turkey’s long-term sovereign credit rating from stable to positive.
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The rating agency declared “Inflation appears to have peaked, albeit at elevated levels of over 60 percent,
“The policy reset will take at least two years to tame inflation.”
Turkey’s central bank expects inflation to reach 70-75 percent in May of next year.
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