Unicredit Updated Its Growth Forecast For Turkey

Unicredit has updated its growth forecast for Turkey. The institution revised its growth expectation upwards.

Unicredit economists, including Gökçe Çelik, stated in their research report that they increased their 2021 growth forecast for the Turkish economy from 7.5 percent to 9.7 percent, while they expected inflation to be 18.4 percent at the end of the year. Unicredit economists, who also increased their 2022 growth forecasts for the Turkish economy from 3.5 percent to 5.5 percent, stated that the monetary relaxation cycle that started earlier than expected and the strong growth in 2021 were effective in this revision. Unicredit, which expects the Central Bank of the Republic of Turkey to cut interest rates by 300 basis points after the 100 basis point interest rate cut in September, said that they expect interest rates to be 14.5 percent in 2022. Economists predict that the USD/TL exchange rate will be 9.30 at the end of the year, and 10.40 at the end of 2022. Economists' forecasts for the end of 2021 for Euro/TL rate are at 11.07. Stating that the interest rate cut expectations may increase the entrances to the local bond market, Unicredit emphasized that this may somewhat limit the short-term risks in the Turkish lira.