S&P Global/Gill: The disinflation process in Turkey begins in 2024-2025
S&P Global Senior Director Frank Gill made statements to Bloomberg HT regarding the Turkish economy.
Noting that they do not expect a downward movement in inflation in the short term in Turkey, Gill said that inflation may remain around 40 percent in 2023 and that the disinflation process may begin in 2024-2025.
Stating that a policy transformation has taken place with the new economy management, Gill said, “We see that they are serious about reducing headline inflation and reducing the current account deficit. We see that they do this without affecting the banks harshly. However, we see that the slowdown in demand is a difficult process. So there are difficult balances,” he said.
“Türkiye cannot benefit from capital inflows yet”
Talking about his expectations for developing countries, Gill said that there are capital flows to countries such as Brazil, Mexico, Indonesia, Hungary and Poland. “Central banks in these countries were once again ahead of the Fed in monetary tightening. There is a negative real interest rate in Turkey, so it cannot benefit from capital inflows yet. However, Türkiye is an important and robust economy. We think that the advantages and opportunities are high.”
Gill noted that the challenge in the coming period will be the slow descent scenario of the economy.
