The economic agenda is intense this week. It is predicted that the policy rate of the Central Bank for this month will be reduced by 250 basis points, bringing it down to 42.5%.

Domestically, last week witnessed a rising trend. The BIST 100 index on the Istanbul Stock Exchange closed the week at 9,658.72 points, gaining 0.59%, with attention now turned to the Central Bank’s interest rate decision and inflation data for the new week. An expectation survey by AA Finance for the Monetary Policy Committee (MPC) meeting to be held by the Central Bank on Thursday, March 6th, with the participation of 20 economists, concluded that all economists forecast that the policy rate will be cut by 250 basis points, reaching 42.5%. The median expectation for the year-end policy rate among economists was 30%. In the MPC meeting held in January, the policy rate was reduced from 47.50% to 45% by 250 basis points.

INFLATION EXPECTATIONS Additionally, an expectation survey regarding the February inflation data to be announced by the Turkish Statistical Institute (TÜİK) on Monday, March 3rd, with the participation of 20 economists, found that the average expectation for February inflation was 2.97%. Economists’ inflation expectations for February ranged from 2.30% to 3.40%. Based on the average inflation expectation for February (2.97%), it is predicted that the annual inflation, which was 42.12% in the previous month, will drop to 40%. The Consumer Price Index recorded a 5.03% increase in January.

ECONOMY GREW BY 3% The Turkish economy grew by 3.2% last year, with a 3% growth in the fourth quarter of 2024. Per capita Gross Domestic Product (GDP) value was calculated at 507,615 Turkish Lira (15,463 US Dollars) in 2024 at current prices. According to the production approach, GDP at current prices increased by 63.5% compared to the previous year, reaching 43 trillion 410 billion 514 million lira in 2024. Moreover, the USD/TRY rate closed the week at 36.5000, 0.15% above the previous closing.

BUSY ECONOMIC AGENDA

In the upcoming week domestically, the focus will be on inflation on Monday, domestic Producer Price Index (PPI), manufacturing sector Purchasing Managers’ Index (PMI), banking sector net profit on Tuesday, real effective exchange rate on Tuesday, Central Bank’s interest rate decision on Thursday, market participants survey on Friday, and treasury cash balance data.