* After 44% slump last year, lira stable in last week
* World Bank sees GDP growth at 2% in 2022,3% next year
* Ankara says deposits in scheme to protect lira rising
* Goldman Sachs says lira likely to remain under pressure
By Daren Butler
ISTANBUL, Jan 12 (Reuters) - Turkey's lira continued a stable trend on Wednesday, in sharp contrast to a volatile plunge last month, as analysts predicted inflation would soar as high as 50% and the World Bank cut economic growth forecasts.
The lira firmed as far as 13.73 to the dollar in early trade and was steady at 13.795 by 0824 GMT.
Thanks in part to authorities' market inventions that helped calm a full-blown crisis late last year, the currency has held in a 13.7-13.94 range in the last week. It shed 44% of its value in 2021 and weakened another 5% last week.
The big emerging market (EM) economy is estimated to have expanded a hefty 9.5% in 2021 despite the market volatility in recent months, according to the World Bank's latest Global Economic Prospects report.
But the bank forecast Turkey's gross domestic product growth would slow sharply to 2.0% this year and 3.0% in 2023. In its previous report last June, it predicted growth of 5.0% in 2021, and 4.5% in both 2022 and 2023.
The $720-billion economy grew 0.9% in 2019 and 1.8% in 2020, weighed down by a recession sparked by a separate currency crisis and later by the coronavirus pandemic.
After the lira slumped to a record low of 18.4 against the dollar in late December, President Tayyip Erdogan announced a scheme to encourage savers to convert deposits from forex, compensating depositors for any losses due to lira weakness.
On Tuesday, Turkey added corporate accounts converted into lira to the scheme, which the Treasury says has attracted some 108 billion lira ($7.8 billion) of deposits.
The central bank conducted several market interventions in December to underpin the currency, cutting its foreign currency holdings by nearly $20 billion, only half of which was formally announced. Analysts say backdoor interventions account for the rest.
MONETARY POLICY U-TURN?
Ankara also announced a 50% minimum wage hike to relieve workers that have seen earnings sharply eroded by inflation soaring to 36% in December.
Goldman Sachs said it expected annual inflation to exceed 40% in January, after which it could surpass 50%, because none of the government measures address this key problem even if they manage to stem dollarisation.
"The deeply negative real rates and the high level of loan growth are likely to keep inflation elevated and continue to put pressure on the lira," the Wall Street bank said in a research note.
"We maintain our view that there will eventually be a U-turn in monetary policy. However, we are likely to see more administrative and regulatory measures before then," it added.
Under pressure from Erdogan, who seeks higher growth by boosting production and exports, the central bank has slashed its policy rate by 500 basis points to 14% since September. It will hold its next rate-setting policy meeting on Jan 20.
Goldman added that inflation should remain elevated until the end of the year when base effects lower it to about 33%.
But Carlos de Sousa, EM debt portfolio manager at Vontobel Asset Management, said he did not predict rate hikes any time soon. "This time is different. Erdogan has finally got tired (of having high interest rates)," he said. ($1 = 13.8134 liras)
(Additional reporting Marc Jones in London; Writing by Daren Butler; Editing by Jonathan Spicer)
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