Turkey Inflation June 2022

Turkey

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

June 8, 2022

Consumer prices jumped 4.95% month on month in June, up from the 2.98% increase recorded in May. The uptick came on the back of a surge in transportation, housing, and hotels, cafes and restaurant prices.

Inflation, meanwhile, surged to a fresh series-high of 78.6% in June (May: 73.5%). June's figure was the highest inflation rate since our current records began. Meanwhile, the trend pointed up, with annual average inflation coming in at 44.5% in June, up from 39.3% in May. Lastly, core inflation rose to 57.3% in June from 56.0% in May.

Analysts at the EIU added:

“Annual inflation may rise further. A weak lira and high costs for raw materials will continue to push up inflation. Inflationary expectations are high. The central bank looks set to maintain its policy interest rate at just 14%, encouraging the use of credit. In addition, pensioners and public-sector employees will receive inflation-linked mid-year pay increases in July, and the government has raised the net minimum wage by a further 30%, which will sustain high inflation by bolstering public purchasing power. Exchange rates will remain a key determinant of price rises and the lira will remain vulnerable to further depreciation.”

Analysts at the EIU added:

“Annual inflation may rise further. A weak lira and high costs for raw materials will continue to push up inflation. Inflationary expectations are high. The central bank looks set to maintain its policy interest rate at just 14%, encouraging the use of credit. In addition, pensioners and public-sector employees will receive inflation-linked mid-year pay increases in July, and the government has raised the net minimum wage by a further 30%, which will sustain high inflation by bolstering public purchasing power. Exchange rates will remain a key determinant of price rises and the lira will remain vulnerable to further depreciation.”

FocusEconomics Consensus Forecast panelists expect inflation to average 68.4% in 2022 and 33.1% in 2023.


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Turkey Inflation June 2022



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