Macroeconomic Outlook and Monetary Policy in Turkey – 2018 October
Macroeconomic Outlook and Monetary Policy in Turkey
Murat Çetinkaya
Governor
October 2018 BALI, INDONESIA
2018 Annual Meeting of the IMF and the World Bank Group
Outline
Macroeconomic Developments
Inflation and Monetary Policy
Overview
Macroeconomic
Developments
Global growthhas remained strongin the first halfof 2018.
(Annual % Change)
Global monetary policy normalizationis expected to
continue.
Policy Rate Changes and Year-end Policy Rate Expectations in Advanced Economies (Basis Points)*
Portfolio flowshaveweakenedin 2018…
Oil and commodityprices have trendedupwards.
Domestic economic activity has decelerated in the second quarter.
Contributionof net exportshas turnedpositive.
Recent data indicate a decelarationin economic activity.
Economic slowdownis domestic demand-driven.
Net exports continue to support economic activity.
External demandcontributes to export growth.
Real exchange rate is at historically low levels.
Recent data indicate a sharp improvement trend in external balance.
Current account deficitwill continueto narrow.
Tourismrevenues have posted a strong rebound.
External debt roll-over ratios have remained stable.
Inflation and Monetary Policy
CPI inflation and core indicators recordedsignificant increases.
Exchange rate depreciation has increasedinflationary pressures.
Demandconditions are expected to limit upside risks on inflation.
A strongmonetary tighteninghas been implemented to support price stability
Loan growth has continued to decelerate.
Overview
Overview
► Rebalancing in the economic activity has become more significant.
► External demand maintains its strength, while slowdown in domestic demand
accelerates.
► Deterioration in the pricing behavior poses upside risks on the inflation outlook, despite
weaker domestic demand conditions.
► A strong monetary tightening has been delivered to support price stability.
► The Central Bank will continue to use all available instruments in pursuit of the price
stability objective.
Macroeconomic Outlook and
Monetary Policy in Turkey
Murat Çetinkaya
Governor
October 2018 BALI, INDONESIA
2018 Annual Meeting of the IMF and the World Bank Group
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Source: Central Bank of the Republic of Turkey
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