Capital Economics view (April 2024): Turkey's rebalancing process has been slower and bumpier than we had expected so far and has taken a setback since the start of the year amid continued strength in domestic demand, hotter-than-expected inflation pressures and a decline in the central bank's FX reserves. The scale of the challenge to reduce Turkey's macro imbalances is clearly very large and will take many years, but the commitment among policymakers to macro orthodoxy has given us reason for optimism. The unexpected 500bp interest rate hike in March strengthened our view that policymakers are serious about tackling inflation and we think there's a case to take a positive view on the medium-term inflation outlook. If we're right that disinflation will soon set in, local currency bonds have the potential to deliver comparatively high returns among EMs over the next couple of years.

This webpage hosts our key research and analysis on Turkey's policy shift. It includes a data dashboard of the most important and timely indicators of Turkey's economy, our analysis of recent central bank meetings and key data releases, as well as a table of our key economic and financial market forecasts.

Key Turkey Forecasts