Turkey's inflation targeting could falter

Significance Tighter monetary and relatively constrained fiscal policies aim to cut high inflation levels. Nevertheless, slowing economic activity will test President Recep Tayyip Erdogan’s administration’s anti-inflationary resolve, as inflation remains high, cutting household and business spending power and raising the likelihood of protests. Impacts The administration will keep implementing measures to check demand for imports. The likely decline in employment may be cushioned by more retirements and/or part-time/flexible working arrangements. The domestic housing market will be susceptible to interest rate cuts. Turkey will remain a risky, if attractive, market for short-term financial investments.