Introduction to Türkiye’s Inflation Outlook
Major international banks such as ING, Goldman Sachs, and BBVA have released updated assessments on Türkiye’s economic outlook ahead of official September inflation data, reflecting continued concerns over price pressures. These banks have been closely watching the country’s inflation rates, trying to predict what will happen next.
Global Banks’ Predictions
Dutch lender ING forecasted a 2.4% monthly rise with annual inflation easing to 32.2%, while U.S. investment bank Goldman Sachs lifted its year-end estimate to 29% alongside a higher policy rate projection. Spanish BBVA kept its 2025 forecast at 30% while raising its 2026 outlook to 23% with slower rate cuts expected. These predictions are based on various factors, including seasonal pressures and the depreciation of the lira.
Seasonal Pressures and Their Impact
ING Global analysts said in a recent report that seasonal factors such as food prices, adverse weather, and the reopening of schools are likely to keep near-term price pressures elevated, even as the annual rate eases. Goldman Sachs, meanwhile, attributed its upward revisions for the year-end figures to the lira’s depreciation in the second half of the year, raising its policy rate projection to 37% while keeping its 2026 inflation estimate unchanged at 20%. These seasonal pressures can have a significant impact on the country’s inflation rates.
Expectations Among Businesses and Households
The Sectoral Inflation Expectations survey for September, released by the Turkish central bank, showed that the 12-month ahead inflation expectation among market participants dropped by 0.5 percentage points to 22.2%. For the real sector, which includes industrial companies, the forecast fell by 0.9 points to 36.8%. Household expectations decreased more sharply, down 1.1 points to 53%. According to the Central Bank of the Republic of Türkiye, the share of households expecting inflation to fall over the next year declined slightly to 27.4%, from 27.6% in the previous month.
Upcoming Inflation Announcement
The Turkish Statistical Institute (TurkStat) will release nationwide inflation figures on September 3, which are expected to exceed 2% due to an uptick in the services group. In August, inflation came in above market expectations, with a monthly rise of 2.04%, while the annual rate fell for the 15th consecutive month to 32.95% from a peak of 75.5% in May 2024. Speaking at a presentation in New York, Central Bank Governor Fatih Karahan said monthly services inflation is expected to increase with the reopening of schools.
Conclusion
In conclusion, global banks have updated their inflation outlook for Türkiye, predicting continued price pressures due to seasonal factors and the depreciation of the lira. The expectations among businesses and households vary, with some predicting a decrease in inflation rates while others expect an increase. The upcoming inflation announcement on September 3 will provide more insight into the country’s economic situation. As the country continues to navigate its economic challenges, it is essential to keep a close eye on the inflation rates and their impact on the economy.
