S&P Global: The disinflation process begins in Turkey in 2024-2025

S&P

In an interview with Bloomberg HT, Frank Gill, Senior Director at S&P Global, stated that the disinflation process in Turkey could begin in 2024-2025. Gill also pointed out that Turkey has not yet fully benefited from capital inflows, but he mentioned, “However, Turkey is an important and robust economy. We believe it has high advantages and opportunities.”

S&P Global’s Senior Director, Frank Gill, made statements to Bloomberg HT about the Turkish economy.

Gill noted that they do not expect a downward movement in inflation in the short term and suggested that inflation could remain around 40 percent in 2023. He also mentioned that the disinflation process could begin in 2024-2025.

Regarding the new economic management, Gill stated, “We see a policy transformation with the new economic management. We observe that they are serious about reducing headline inflation and narrowing the current account deficit. We also see that they are doing this without severely impacting banks. However, we acknowledge that demand slowdown is a challenging process, so there are difficult balances to be struck.”

Turkey has not yet been able to benefit from capital inflows.

Gill mentioned their expectations regarding developing countries and stated that countries like Brazil, Mexico, Indonesia, Hungary, and Poland have experienced capital inflows. He pointed out that these countries’ central banks were ahead of the Federal Reserve in terms of monetary tightening. However, in Turkey, there is negative real interest rates, which is why it has not yet been able to benefit from capital inflows. Nonetheless, Gill emphasized that Turkey is an important and robust economy, and they believe it has significant advantages and opportunities.

Gill also noted that the upcoming challenge for Turkey would be an economic slowdown scenario.

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