Global Banks Highlight Cautious Disinflation Path for Türkiye’s Economy

Leading global financial institutions have recently updated their economic outlooks for Türkiye, offering closely watched assessments of inflation trends and interest rate prospects as the country’s monetary policy enters a sensitive transition phase. Analysts broadly agree that disinflation is underway, though risks remain elevated and policy discipline is seen as critical.

ING: Inflation Below 30% Possible by End-2025

In its latest macroeconomic assessment, ING underlined that Türkiye is on a gradual disinflation path, provided macroeconomic stability is preserved. ING economists stated:

“Barring any unforeseen disruptions in exchange rates, wages, regulated prices or commodity markets for the remainder of the year, we expect the annual inflation rate to fall below 30% by the end of 2025.”

On monetary policy, ING added that tighter financial conditions are likely to remain in place for some time, noting:

“Given this outlook, our year-end policy rate projection stands at 35%.”

ING’s analysis points to moderating domestic demand and tighter monetary transmission as key contributors to easing price pressures, while also highlighting exchange rate stability as a critical variable.

Morgan Stanley: Gradual Disinflation, Careful Rate Cuts

Morgan Stanley has echoed a similarly cautious tone, forecasting a steady but uneven decline in inflation over the coming quarters. In its most recent outlook, the investment bank noted:

“We expect 2025 year-end inflation in Türkiye to moderate toward 30% as disinflation dynamics continue to take hold, supported by tight monetary conditions.”

Regarding interest rates, Morgan Stanley emphasized a gradual approach, stating:

“The rate-cutting cycle is likely to proceed cautiously, with the policy rate projected to be around 37% by the end of 2025.”

The bank also warned that core inflation—particularly in services—may ease more slowly, potentially limiting the pace of monetary easing despite improvements in headline inflation.

Alignment with Official Policy Signals

These international assessments broadly align with messaging from the Central Bank of the Republic of Türkiye, which continues to stress a data-dependent policy framework and the importance of maintaining tight financial conditions until a sustained decline in inflation is firmly established.

Economists note that while inflation in Türkiye remains high by global standards, the downward trend from recent peaks is increasingly visible. However, global energy prices, food inflation, wage dynamics, and exchange rate movements are widely cited as factors that could influence the speed of disinflation.

Outlook

Taken together, the views from ING and Morgan Stanley suggest growing confidence among global analysts that Türkiye is moving toward a lower-inflation environment—albeit gradually and with limited room for policy error. Markets are expected to continue focusing on monthly inflation data and central bank communication as key signals for the timing and scope of future rate adjustments.