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Turkey Inflation November 2021

Turkey: Inflation comes in at three-year high in November

Consumer prices rose 3.51% month-on-month in November, up from the prior month’s 2.39% increase. November’s print marked an over three-year high and came on the back of notable price increases for transportation, food and non-alcoholic beverages, and hotels, cafes and restaurants.

Inflation, meanwhile, jumped to a three-year high of 21.3% on November from October’s 19.9%. Meanwhile, the trend pointed up, with annual average inflation coming in at 17.6% in November (October: 17.1%). Finally, core inflation rose to 17.6% in November, from the previous month’s 16.8%.

Muhammet Mercan, chief Turkey economist at ING, commented:

“Inflation will likely remain high in the near term and at elevated levels in the first half of next year before starting to moderate into year-end 2022 with the support of large base effects. While the broad-based rise in prices (due to import prices and higher trend inflation) increases upside risks for next year, the most important driver of the outlook is the path of the lira. The Central Bank of Turkey is not comfortable with currency movements as banks have directly intervened for the first time after many years. Given this backdrop, the governor reiterated in the latest investor meeting that there was limited room for another rate cut though this will be determined by developments ahead of the December meeting.“

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