Goldman Sachs backs faster decline of Turkish lira
Economists at Goldman Sachs expect Turkish monetary authorities to accelerate the depreciation of the Turkish lira in order to protect the external balance and prevent an increase in the deficit, even though this will slow down the reduction of inflation. The bank predicts that the value of the lira against the dollar will decline at an annual rate in the mid-20% range. In 2023, the lira depreciated by about 9% against the dollar, while consumer prices rose by over 17% in the first half of the year, leading to an annual inflation rate of 32.1% in June. It is also expected that the current account deficit will widen to 3.5% of GDP, approximately $60 billion, due to Turkey losing market share of its exports to China and Eastern Europe.
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