Bank sees loan growth at 14 pct

ISTANBUL

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The Central Bank has predicted that the country’s loan growth rate will be at 14 percent by the end of the year, in harmony with its earlier forecast.

At a press conference in Istanbul to present the inflation report yesterday, Central Bank Gov. Erdem Başçı said 14 percent seemed adjustable and sustainable for developing countries such as Turkey.

The bank increased its inflation forecasts for this year and next, blaming higher energy prices and tax hikes, and said it would be more cautious in its efforts to support a gradual pickup in growth next year.
The bank raised its inflation forecast for 2012 to 7.4 percent from 6.2 percent, and for 2013 to 5.3 percent from 5.1 percent, still stubbornly above its medium-term target of 5 percent, but said core inflation was on a downward trend.

It promised more predictability in its moves to bolster domestic demand in 2013 after pursuing a complex policy mix which, while helping to achieve the desired soft landing this year, has in the past sometimes wrong-footed the market.

The bank has been cautiously easing monetary policy since July to try to stimulate domestic demand, providing more lira liquidity to the banking system and cutting its overnight lending rate. Still it has tried to avoid stoking inflation.