A normalisation of the global economic scenario could take place in the coming 18-24 months, according to doctor Osman Cevdet Akcay, a senior economist speaking at the opening of the Kallanish Flat Steel conference held in Istanbul this week.

Currently global economies are being strongly affected by inflation, but the latest decision of the US Federal Reserve to tackle inflation even at the cost of significantly slowing down economic growth (or even initiating a recession) has been accepted by international policy makers and is expected to have positive effects in 2024. Similarly the European Central Bank authorities are looking to tackle inflation despite a recession looming.

Dr Cevdet believes this position in favour of deflation against economic growth is going to be beneficial. The recent outlooks point to record levels for inflation levels in 2022, but a slowdown in inflation should already be achieved in 2023 (excluding for China).

He added that for developed economies the end of 2022 and 2023 wil be very bumpy, but a normalisation is in sight. He noted also that some countries such as India will have a smoother ride during the next months, as will the Asia-5 countries.

“The Fed and the ECB want to limit and reduce inflation at whatever costs and the market has finally understood we need to go though recession to deflate. Having said that, I remain relatively positive toward a normalisation in the next 18-24 months; if a truce is agreed between Russia and Ukraine I would even become very positive,” Dr Cevdet noted.

On the exchange rate side, Dr Cevdet said “I would bet on the Dollar strength.”