Central Bank announces inflation forecasts
Central Bank (CBRT) President Şahap Kavcıoğlu announces the first inflation report of 2023 with a press conference in Ankara.
CBRT’s year-end consumer inflation forecast for 2023 held steady at 22.3 percent. CBRT’s year-end consumer inflation forecast for 2024 held steady at 8.8 percent. The CBRT’s food inflation forecast for the end of 2022 remained unchanged at 22 percent.
The headlines of Kavcıoğlu’s speech are as follows:
* Recently, a normalization trend has begun to be observed in energy prices with significant drops.
* Inflation expectations for 2023 have begun to be updated downward in many countries, such as in our country.
* Economic activity data in 2022 was more positive than expected.
* The probability of a deep recession appears to be declining.
* Despite the loss of dynamism in economic activity due to external demand, the labor market continues to perform well.
* Energy and parity price developments are expected to positively affect the current account deficit. The structural current account surplus, which is calculated excluding cyclical effects on international prices, increased throughout the year.
* The slowdown in inflation was also reflected in expectations: our indicators of the underlying trend in inflation confirm the significant slowdown. There is no basis for the continuation of price increases.
* With a probability of 70 percent, inflation is between 17.8 percent and 26.9 percent at the end of 2023 (midpoint 22.3 percent), it is expected to occur between 4.0 percent percent and 13.7 percent at the end of 2024 (midpoint 8.8 percent).
* We do not anticipate a situation that will reflect negatively on prices during the selection process.