Turkey is expected to cut its economic growth forecasts and raise that of inflation on Wednesday as it seeks to take a more orthodox and realistic policy path, which analysts say could test the patience of President Tayyip Erdogan.
Erdogan and top economic officials will unveil new forecasts for growth, inflation, unemployment, the current account and other measures in an annual "medium-term programme", seen as a milestone in a broader policy U-turn that began in June.
After his May re-election, Erdogan - faced with deep economic strains and badly depleted forex reserves - named a new cabinet and central bank chief to undertake aggressive interest rate hikes and begin freeing up credit and forex markets.
The lira has since shed 25% to the dollar and annual inflation jumped to near 59% last month.
A Reuters poll last month showed expectations of 2.9% full-year growth, lower than trend in the emerging market economy that seeks to reverse a years-long exodus of foreign investors.
With Erdogan's ruling AK Party seeking to reclaim big cities Istanbul and Ankara from the opposition in the March vote, some analysts say higher inflation and unemployment and lower growth could test the president's patience with the U-turn.
Erdogan has fired four central bank governors in four years. His push to slash rates despite rising prices led to a historic currency crash in late 2021 and sent inflation above 85% last year.
"The risk is ever-present that...Erdogan could lose patience," said Commerzbank analyst Tatha Ghose. Inflation will "be very high for an extended period of time, which will trigger second-round effects such as wage settlements."
The central bank has said inflation will likely rise to near 62% by year end, the upper bound of its earlier forcast, despite a more aggressive-than-expected 750-point rate hike in August.
