Turkey: Inflation climbs further into double-digit territory in April
Consumer prices rose 1.87% from the previous month in April, up from March’s 0.99% rise and overshooting analysts’ expectations. April’s uptick came on the back of significant price rises for clothing and footwear, transportation and furnishing and household equipment. Prices for food and non-alcoholic beverages fell slightly month-on-month.
Inflation reared up again in April following four consecutive monthly slowdowns which were driven in part by a sizeable base effect. Inflation came in at 10.9%, up from March’s 10.2% and substantially exceeding market expectations. Worryingly, core inflation also rose sharply, from 11.4% in March to 12.2% in April. Elevated price pressure are being driven by substantial fiscal stimulus—which looks set to ramp up further ahead of June’s snap elections—and the sustained depreciation of the lira, which sank to a record low against the dollar on release of April’s inflation figures. Annual average inflation remained at 11.1% in April.
Looking ahead, inflation is likely to remain high in the short term despite tighter monetary policy, on the back of strong domestic demand, elevated oil prices, a weak lira and higher inflation expectations.