BBVA: We Maintain Our Year-End Inflation Forecast for Turkey at 26.5% for 2025

BBVA (BME:BBVA) Research has maintained its inflation forecast for Turkey at 26.5% by the end of 2025.

In its evaluation following the December inflation data release, BBVA indicated that expectations for a slight improvement in annual inflation during the first quarter could create room for the Central Bank of the Republic of Turkey (TCMB) to continue its easing cycle. They expressed the belief that a cautious stance should be maintained to provide sufficient positive real interest rates to preserve the attractiveness of Turkish Lira assets.

The bank noted, "Despite recent downward risks arising from the potential for the minimum wage adjustment to fall short of expectations and the likelihood that some managed price adjustments may be limited, the unanchored high inflation expectations, strong inertia, the high probability that real interest rates could be lower than our expectations, and uncertainty regarding the magnitude of fiscal policy support could pose upward risks and motivate us to maintain our inflation forecast at 26.5% for the end of 2025."