Video|10 October 2024

MENA | Will Turkey’s Inflation Continue to Ease and UAE’s VAT Changes Boost Growth?

Scott Livermore

Chief Economist & Managing Director

Turkey’s annual inflation continued to ease for the fourth consecutive month during September, recording 49.4% down from 52% in August. We expect the underlying pace of inflation will soften further over the rest of this year and think inflation will ease to 20.4% by end-2025. Our forecast is above the government’s updated end-2025 target of 17.5%. The CBRT kept rates on hold last month, and we expect policy rates to remain unchanged throughout this year as the authorities balance anchoring inflation expectations with a moderating economic activity.

The UAE announced amendments to its value-added tax regime. The adjustments encompass exemption of some financial sector services and in-kind donations between charitable and government entities. The exemptions aim to support the societal role of charitable entities while supporting growth. We expect the UAE to achieve non-oil GDP growth of 4.5% this year.

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