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May 16, 2025
Hard data confirms a robust quarterly GDP growth in 1Q25, similar to the previous quarter (1.7% q/q in 4Q24), driven primarily by domestic demand. Leading indicators signal a broad-based weakening in activity for 2Q25. We maintain our 2025 GDP growth forecast of 3.5% with risks becoming tilted to downside.
May 15, 2025
The tightening steps of the CBRT in the aftermath of the March shock were followed by much tighter financial conditions and additional macro-prudential measures throughout April and early May. Deposit rates rose to their highest level since Dec24. Credit growth maintains its limited growth.
May 5, 2025
Consumer prices rose by 3.0% m/m, in line with our expectations but slightly lower than the consensus (3.2%), resulting in an annual inflation of 37.9%. We maintain our 2025 year-end inflation forecast of 31%, which we had lowered from the previous 32% amid the recent decline in oil prices.
April 25, 2025
We develop big data-based, high-frequency sectoral indicators using bank transaction data to nowcast real-time sectoral GDP growth, enhancing accuracy through modeling techniques and strong alignment with official statistics.
April 17, 2025
The CBRT hiked the policy rate by 350bps to 46%, surprising the consensus of no change, and narrowed down the interest rate corridor to 44.5%-49%. Contrary to previous assessments of recent shocks as transitory, the CBRT becomes more prudent hiking its main tool and reaching an availability of the funding rate up to 49%.
April 17, 2025
High frequency data for 1Q25 point that the q/q growth will likely remain steady as in 4Q24, supported by the domestic demand. Despite the uncertainty on trade wars and recent tightening in financial conditions, we evaluate risks as balanced on our 2025 GDP growth forecast of 3.5%, given the strong buffer of 1Q25 growth.
April 16, 2025
On the back of both internal & external shocks, the CBRT hiked the ON lending rate to 46% and squeezed TL liquidity in March. With the tightening steps, credit growth decelerated and the increased funding costs are expected to weigh on the 2025 profitability of the sector.
April 3, 2025
Consumer inflation rose by 2.46% m/m, lower than both our expectation (3%) and the market consensus (2.9%), driving annual inflation down to 38.1%. We have revised our 2025 year-end inflation forecast to 32% from 29% on the expected pass-through from the recent currency depreciation.
March 20, 2025
Credit growth accelerated throughout February beyond the growth caps. Therefore, the monthly growth limit has been reduced further for FC lending at the start of March. The CBRT aims not to allow demand conditions to contain the disinflation process, signaling new macro-prudential measures if necessary.
March 11, 2025
Global financial volatility has risen due to the impact of evolving US policies, which we expect to create negative shocks. In Türkiye, financial conditions have recently eased above the neutral level and credit growth has accelerated beyond the capped segments, increasing the challenges on the inflation outlook.
March 7, 2025
We integrate our findings in export concentration, value added in exports, and economic complexity for Türkiye and Mexico. While both countries have increased their complexity through time, targeted fiscal incentives directed towards competitive industries may help attain more complex products in exports.
March 6, 2025
The Central Bank (CBRT) lowered the policy rate by 250bps to 42.5% as expected. Following the positive surprise of Feb CPI, the CBRT remains comfortable despite stronger domestic demand than expected. We expect 250bps cut in April and the pace of rate cuts to decelerate June onwards, reaching 31.5% policy rate by end 2025.
