Turkey: Inflation comes in at two-decade high in March
Consumer prices increased 5.46% over the previous month in March, picking up from February’s 4.81% increase. The print was driven by surging transportation prices on the back of skyrocketing oil prices due to Russia’s invasion of Ukraine. Furthermore, education and hotels, cafes and restaurants prices also rose notably.
Inflation came in at 61.1% in March, which was up from February’s 54.4%. March’s reading represented the highest inflation rate in two decades and was driven by greater energy prices. Meanwhile, the trend pointed up, with annual average inflation coming in at 29.9% in March (February: 26.0%). Lastly, core inflation rose to 48.4% in March, from the previous month’s 44.1%.
The outlook for inflation remains pretty grim, with Murat Unur and Clemens Grafe, analysts at Goldman Sachs, commenting:
“we expect inflation to rise above 65.0% year-on-year and remain above this rate for most of 2022. We see a peak around 67.0% yoy in May-June, though we think that there is a significant range of uncertainty around the timing and the level of the peak. We expect inflation to decline meaningfully only in December, to 45.0% yoy, on the back of base effects. Our model currently points to an end-year inflation rate of 48.0% yoy, suggesting upside risks to this number.”
The outlook for inflation remains pretty grim, with Murat Unur and Clemens Grafe, analysts at Goldman Sachs, commenting:
“we expect inflation to rise above 65.0% year-on-year and remain above this rate for most of 2022. We see a peak around 67.0% yoy in May-June, though we think that there is a significant range of uncertainty around the timing and the level of the peak. We expect inflation to decline meaningfully only in December, to 45.0% yoy, on the back of base effects. Our model currently points to an end-year inflation rate of 48.0% yoy, suggesting upside risks to this number.”