Turkey’s inflation seen dropping to 27pc by 2022

Already rampant inflation in Turkey will rise further in the coming months before declining to around 27 per cent by the end of the year, a Reuters poll showed on Monday, as forecasts soared after a currency crisis in 2021 sent prices rocketing.

Turkey's inflation surged to 36 per cent in December after a series of interest rate cuts by the central bank, long sought by President Tayyip Erdogan, prompted the lira to lose 44 per cent of its value against the dollar last year.

The annual consumer price index (CPI) was seen standing at 40 per cent by the end of the first quarter and 39 per cent by mid-year, according to the median estimate in the January 10-14 Reuters poll.

Inflation was seen declining to 26.8 per cent by the end of 2022, and to 15.4 per cent in 2023, in sharp contrast to government expectations that inflation would decline to single digits by mid-2023. Estimates for inflation at the end of 2022 ranged widely from 17 per cent to as high as 46 per cent.

Despite the government's recent policy of keeping interest rates low to boost exports and credit, some economists saw the central bank changing direction and hiking its policy rate in the future.