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Turkey Inflation January 2024

Turkey: Inflation comes in at highest level since November 2022 in January

Inflation rose to 64.9% in January, above December’s 64.8%. January’s figure was the highest inflation rate since November 2022. Looking at the details of the release, prices for transporation and for housing and utilities rose at a quicker pace in January compared to the previous month.

The trend pointed up, with annual average inflation coming in at 54.7% in January (December: 53.9%). Meanwhile, core inflation edged down to 70.5% in January, from the previous month’s 70.6%.

Lastly, consumer prices increased 6.70% in January over the previous month, picking up from December’s 2.93% increase. January’s result was the highest reading since August 2023, and was due to a 49% minimum wage increase that took effect this month.

The Consensus is for inflation to hover around current levels in H1. Our panelists do not foresee a significant slowdown until the second half of the year.

Analysts at the EIU commented on the outlook:

“We expect inflation to average about 52% in 2024 […] Interest rates are still well below inflation, and we expect real rates to remain negative until 2025, which will encourage spending. A weak lira will also keep inflation high in the early months of 2024, before the base effects of the third quarter of 2023 kick in.”

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