Turkey: Inflation continues to climb in October
Consumer prices rose 2.67% from the previous month in October, down from September’s 6.30% increase, according to data released by the Turkish Statistical Institute (Turkstat). October’s price increase was chiefly driven by higher prices in the clothing and footwear; furnishing and household equipment; and food and non-alcoholic beverages sub-sectors.
Inflation increased for the seventh consecutive month, from 24.5% in September to 25.2% in October, marking a fresh multi-year high and fueled by the huge depreciation of the currency observed since the start of the year. In addition, core inflation ticked up from 24.1% in September to 24.3% in October.
Looking ahead, inflation could rise even further in the near term, as the pass-through effects from the weaker lira continue. Moreover, producer price inflation clocked 45.0% in October, and firms could continue to pass these costs on to consumers in the coming months. However, price pressures should then gradually ease on weak domestic demand, although elevated inflation expectations will slow the decline. The evolution of the volatile lira will be a key risk to the inflation outlook going forward.