Turkey Inflation to Ease Only Slightly to 55.5% by End-2022

A man looks at a butcher shop window in Ankara, Turkey February 16, 2022. (Reuters)
A man looks at a butcher shop window in Ankara, Turkey February 16, 2022. (Reuters)
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Turkey Inflation to Ease Only Slightly to 55.5% by End-2022

A man looks at a butcher shop window in Ankara, Turkey February 16, 2022. (Reuters)
A man looks at a butcher shop window in Ankara, Turkey February 16, 2022. (Reuters)

Turkish inflation is seen slipping only to 55.5% by year-end, a Reuters poll showed on Friday, remaining elevated for longer than Ankara expects thanks to unconventional monetary policy and a persistently weak currency.

Inflation in Turkey has soared since December in the wake of a currency crisis that tore 44% off the lira's value against the dollar last year.

Prices rose 61% in March from a year earlier, lifted further by higher global commodity prices following Russia's invasion of Ukraine in late February.

While the government expects a sharp drop in inflation at the end of 2022 due in part to favorable base effects, the median estimate in the Reuters poll of 31 economists showed it slipping only a few percentage points to 55.5%.

That forecast is more than double the median estimate of 26.8% by year-end in a poll conducted in January.

Inflation is now forecast to drop to around that level, 25%, a year later, in stark contrast to Ankara's view it would be in single digits by the middle of next year.

It was seen falling to 17.8% by the end of 2024, based on a lower sample of poll contributors.

A currency crisis last year was prompted by a series of central bank interest rate cuts long sought by President Recep Tayyip Erdogan, who holds the unorthodox view that higher interest rates cause inflation rather than restrain it.

"Even before the onset of the geopolitical crisis in late February, Turkey's macro outlook was subject to considerable uncertainty due to the implementation of unconventional policies shaped by President Erdogan's views," noted Berna Bayazitoglu, analyst at Credit Suisse.

"In the absence of credible policies, Turkey's macro visibility and predictability remain low, keeping the margin of error around our base-case forecasts unusually large."

The central bank was forecast to hold its policy rate at 14.0% through to the end of 2023, although some economists predicted rate hikes up to 27.0% and others saw it 50 basis points lower at 13.5% by then.

Erdogan's new economic program stresses exports and credit to fuel growth, despite soaring inflation and widespread criticism of the policy from economists and opposition lawmakers.

Turkey's economy bounced back from the COVID-19 pandemic to grow 11% last year, its highest rate in a decade. But it has already slowed substantially and will continue to do so.

The median estimate of 37 economists for gross domestic product (GDP) growth in 2022 was 3.0%, compared to 3.5% in the previous poll. The median for 2023 was revised down to 3.3% from 4.0% previously.

Both the government and central bank have recently said Turkey's biggest economic problem is the chronic current account deficit, largely due to Turkey's heavy import bill.

However, surging energy prices have led to a widening in the current account deficit, which may also be made worse by a likely drop in tourism from Russia and Ukraine this summer.

Economists have sharply revised up their estimate for the current account deficit this year to a median 4.4% of GDP in this month's poll compared with 2.1% in January. They see it at 2.8% in 2023, from 2.3% previously.



Iraq Oil Output Exceeds 5 million bpd

Majnoon oil field near the Iraqi city of Basra (Reuters)
Majnoon oil field near the Iraqi city of Basra (Reuters)
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Iraq Oil Output Exceeds 5 million bpd

Majnoon oil field near the Iraqi city of Basra (Reuters)
Majnoon oil field near the Iraqi city of Basra (Reuters)

Iraq produces more than 5 million barrels of oil per day (bpd), Oil Minister Basim Mohammed told state news agency INA on Saturday.

According to Reuters, Iraq is pushing for a higher OPEC production quota as the economic fallout from the Iran war and new investment by oil majors increase pressure on Baghdad to boost output, potentially putting it at odds with the producer group.

The conflict has hit Iraq particularly hard, forcing major export cuts and depriving the state of oil revenue, which accounted for 88% of government income last year.


IMF: Any Slowdown in AI-driven Growth Would be Factor for Central Banks

IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)
IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)
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IMF: Any Slowdown in AI-driven Growth Would be Factor for Central Banks

IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)
IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)

Central bankers around the world would need to consider any slowdown in AI-driven growth as they assess steps in their fight against inflation, International Monetary Fund Managing Director Kristalina Georgieva said on Friday.

Georgieva said concerns about dependence on the AI investment boom and high valuations were impacting markets around the world.

"Things are going up and down, and this is likely to continue," she told an audience at IMF headquarters in Washington, adding that the volatility would complicate the job of central banks at a time when risks to price stability had been growing.

A steep rout in technology stocks on Thursday rippled through markets on fears that ⁠the Democrats' victory ⁠in the US midterm elections would increase regulatory scrutiny of AI and slow the data center build-out, sending investors to the safety of bonds.

The political jitters are hitting an AI trade already on shaky footing due to worry about return on massive spending on AI-related infrastructure, with the meltdown spurring margin calls and spooking retail investors and hedge ⁠funds alike.

Georgieva said the AI investment boom was lifting growth in some countries, helping to offset a negative oil-supply shock triggered by the war in the Middle East, but it was also adding to inflationary pressures and financial stability concerns.

The IMF last month flagged significant growth and financial stability risks from a potential ending of the AI investment boom, among other factors, including a prolonged Middle East war. At the time, it warned that a steep drop in AI investment could lead to a sharp fall in asset prices, ultimately cutting global GDP ⁠by 1.1% ⁠by 2028, including a 1.8% drop in US output.

Georgieva did not repeat the downside forecast on Friday, but acknowledged the recent market volatility.

"Should there be a slowdown in the AI-driven growth impulse, it would need to be factored in as central banks assess the necessary steps in the fight against stubborn inflation," she said.

Democrats are planning to unleash a flood of new legislation targeting artificial intelligence systems and data-center development when they take control of the US Congress in January, Reuters reported on Friday, citing congressional aides and advocates.

That would mark a sharp shift from the Republican-led Congress, where lawmakers largely focused on promoting AI development and declined to pass legislation restricting the technology.


World Food Prices Dip in October, but Remain Higher Than a Year Ago

A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
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World Food Prices Dip in October, but Remain Higher Than a Year Ago

A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)

World food prices edged lower in October as weaker import demand contributed to monthly declines in cereal, dairy and meat prices, but were still nearly 6% higher than a year earlier, the United Nations' Food and Agriculture Organization said on Friday.

The FAO Food Price Index, which tracks monthly changes in international prices for a basket of food commodities, ‌averaged 133.9 points ‌in October, down from a revised ‌135.6 ⁠in September.

The index ⁠was 5.9% higher than a year earlier, but remained 16.4% below its March 2022 peak.

FAO's cereal price index fell 4.5% from September and was 12.6% lower than a year ago, as wheat and maize quotations declined. Wheat prices eased on weak import demand ⁠and improved production prospects, especially in Argentina.

"Expectations of ‌easing constraints on Black ‌Sea export flows added to the downward pressure on prices, ‌although continued disruptions to Black Sea logistics limited the decline," ‌FAO said in a statement.

Maize prices also eased after reaching a three-year high in September, pressured by the US harvest, expectations of ample supplies in South America and renewed ‌prospects of easing tensions in the Black Sea region.

Vegetable oil prices edged up 0.3%, ⁠as ⁠higher soybean and sunflower oil prices more than offset a fall in rapeseed oil prices.

Sugar prices rose 6.6%, their fourth straight monthly increase, to the highest level since December 2024, after rainfall disrupted harvesting in Brazil. They were now 28.8% above a year ago.

The dairy index fell 1.1%, as lower butter and cheese prices linked to ample supplies and subdued demand outweighed gains in milk powder.

The meat index declined 1.2%, while still slightly above its year-earlier level, as ovine and bovine meat prices fell.