Turkish economic growth will fall just short of the central bank’s 4 percent target this year and inflation will peak in May, governor Erdem Basci said on Thursday, giving an upbeat view of the economy a week before a rate-setting meeting.
Basci told the bank’s annual general assembly that he saw no need for Turkey to lower its growth target for this year despite the World Bank and International Monetary Fund’s recent cuts to their outlooks for the country.
His views on growth and inflation, which he said would remain “well above” the bank’s 5 percent target this year, were more optimistic than the market consensus, suggesting to some that he was paving the way for looser monetary policy – albeit not outright rate cuts – in the months ahead.
The bank meets to set interest rates next Thursday.
“The central bank appears to be hedging its bets, mulling a loosening of policy but clearly conscious of the risks of a premature cut in interest rates,” said William Jackson, emerging markets economist at Capital Economics in London.