05.12.2025 16:45
Deutsche Bank has revised its expectations for the dollar/TL exchange rate, inflation, interest rates, and growth upwards in its new report prepared for Turkey. The bank reports that the dollar is expected to rise to 43 TL by the end of 2025, with a forecast of 52 TL for 2026 and 62 TL for 2027.
Germany-based Deutsche Bank stated in its comprehensive assessment report regarding the Turkish economy that carry trade is currently prominent, but the risk-return balance is expected to weaken as the year progresses. The bank emphasized that the investment environment will become less favorable, particularly due to the decline in carry returns and the sticky nature of inflation.
"DOLLAR WILL BE 62 TL" PREDICTION
The report included significant predictions regarding the exchange rate. Accordingly, the bank forecasts that by the end of 2025, the dollar/TL will rise to 43. According to the medium-term projection, the exchange rate is expected to reach 52 TL in 2026 and 62 TL in 2027.
"INFLATION IS FALLING BUT SLOWING"
Deutsche Bank noted that inflation, which rapidly declined in the first half of 2025 due to base effects, slowed down again in the second half of the year. It was stated that due to the ongoing increase in food prices, the stickiness of service inflation, and the weakening of base effects, the year-end inflation would remain significantly above the Central Bank of the Republic of Turkey's (CBRT) target of 24%. The bank updated its inflation forecast for 2026 to 23.8%.
"100 BASIS POINTS CUT MAY COME AT EVERY MEETING"
Sharing its expectations regarding monetary policy, Deutsche Bank announced that it expects approximately 100 basis points of interest rate cuts at each Monetary Policy Committee (MPC) meeting in the upcoming period. According to this forecast, the policy interest rate will decline to 30.5% by the end of 2025.
It was noted that if a stronger improvement in disinflation occurs, 150 basis points cuts could also be on the agenda. The bank predicts that by the end of 2027, the policy interest rate will be around 25%.
GROWTH FORECAST RAISED
The report emphasized that economic activity maintained its resilience in the first nine months of 2025, stating that growth during this period was 3.7%. Deutsche Bank raised its growth forecast for 2025 from 3.5% to 3.8%.
For 2026, a growth expectation of 4.2% was shared. It was noted that sectors such as defense, services, and construction are positively differentiating, while the outlook in low value-added sectors like textiles is weakening.