By Gokhan Kurtaran
LONDON (AA) - The Turkish banking sector demonstrated resilience to challenging macroeconomic conditions over time and banks are well-capitalized with troubled assets remaining low compared to their peers, lead regional economist from the European Bank for Reconstruction and Development (EBRD) told Anadolu Agency on Friday.
Roger Kelly evaluated the general outlook of the Turkish banking sector and said bank returns are strong, thanks to high-net interest margins linked to the current monetary policy approach.
He said that the EBRD raised its growth expectation for the Turkish economy from 2% in May to 4.5% for 2022.
"Growth has been significantly more resilient than we expected, especially given the expected impact of higher rates of private consumption on real incomes," he said.
Kelly pointed out that households may have preloaded their consumption expenditures in anticipation of an increase in inflation. "They may have made it relatively earlier and collectively."
The expenditures of households in the country are supported by government measures to support purchasing power, especially with increases in the minimum wage and pensions, he added.
"Given the upcoming elections, we expect the authorities to continue to provide support to households in the months to come," he said.
Despite the high level of economic activity in Türkiye, macroeconomic imbalances have aggravated because of high inflation, the widening of the current account deficit and pressure on the Turkish lira, he said.
Kelly said the bank has not published forecasts for inflation rates of the economies.
"However, given the moderation in commodity prices, it seems likely that inflation is close to its peak and base effects will reduce it (inflation level) to about 70% by the end of the year," he said.
Türkiye's annual inflation rate is projected to rise to 84.26% in September, an Anadolu Agency survey found Friday.
The figure was 80.21% in August.
The Turkish Statistical Institute will announce September's consumer price index next Monday.
Year-end inflation expectations rose from 72.35% to 73.88%.
*Aysu Bicer in Ankara contributed to this story