JP Morgan Updated Turkey’s Growth Forecast

JP Morgan has updated Turkey’s growth forecast. The institution revised its forecast upwards after vaccination.

In a research report it published, JP Morgan announced that it revised its growth forecast for Turkey upwards with vaccination studies. Underlining that the slowdown in loan growth and the increase in the vaccination rate despite high interest rates, JP Morgan economists announced that they updated their 2021 growth forecasts for Turkey from 6.1 percent to 6.8 percent. Stating that the update was made mostly by taking into account the strong domestic demand, JP Morgan stated that the need for tight monetary policy continues to increase. Emphasizing that the Central Bank of the Republic of Turkey's (CBRT) interest rate decision was realized in line with its expectations and there was no change in communication, JP Morgan noted that the fall in inflation would be around November in line with their own forecasts. JP Morgan said this means that the CBRT will keep interest rates steady until the end of the year. Stating that the CBRT's relatively hawkish attitude gives hope, JP Morgan explained that the inflation, which was below the expectations in April and May, is temporary and that the main factors affecting inflation continue. Stating that they expect the first interest rate cut to take place in September with 100 basis points, the bank stated that an early easing could harm the currently weak policy credibility.