Goldman sees Turkey inflation of near 80% before relief comes

FILE PHOTO: People stroll at Mahmutpasa street, a middle-class shopping area in Istanbul

ISTANBUL (Reuters) – Goldman Sachs said on Friday it expects annual inflation in Turkey to reach almost 80% before easing to 60% by the end of 2022, thanks to so-called favourable base effects.

Inflation in Turkey hit 73.5% in May, stoked by a currency crisis last year and soaring energy costs due to Russia’s invasion of Ukraine.

The lira lost 44% against the dollar in 2021 in addition to another 24% so far this year. It remains under pressure as real yields in Turkey are deeply negative amid a global tightening cycle.

(Reporting by Jonathan Spicer; Writing by Ali Kucukgocmen)