Turkey Inflation September 2022


Turkey: Inflation comes in at highest level since our records began

October 3, 2022

Inflation rose to 83.5% in September, following August’s 80.2%. September's figure marked the highest inflation rate since our current records began. The figure was primarily driven by rising prices for food and non-alcoholic beverages. In addition, price pressures for transport grew at a faster pace.

The trend pointed up, with annual average inflation coming in at 59.9% in September (August: 54.7%). Meanwhile, core inflation rose to 68.1% in September, from August’s 66.1%.

Lastly, consumer prices increased 3.08% in September over the previous month, accelerating from the 1.46% increase recorded in August.

Muhammet Mercan, chief Turkey economist at ING, added:

“Elevated cost-push pressures and an accommodative monetary policy stance hint at further challenges to the outlook. We expect annual inflation to peak above 85% in October, before a decline to around 70% at year-end, with risks to the upside given the deterioration in pricing behaviour, higher trend inflation and exchange rate developments. On the flip side, the expected slowdown in domestic demand in the second half of this year is likely to limit these pressures to some extent.”

Goldman Sach’s Clemens Grafe commented:

“Going forward, we expect inflation to only fall to +75%yoy at year-end with the help of base effects. The risk to our forecasts is significantly to the upside, especially as the government is likely to push for growth through both fiscal and monetary channels and is likely to introduce further wage hikes and other support measures ahead of elections in 2023.”

FocusEconomics Consensus Forecast panelists expect inflation to average 72.0% in 2022 and 38.5% in 2023.


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