Turkey Inflation July 2018

Turkey

Turkey: Inflation continues to rise in July

August 3, 2018

Consumer prices rose 0.55% from the previous month in July, down from June’s 2.61% rise, according to data released by the Turkish Statistical Institute (Turkstat). July’s price increase was driven by higher prices for transportation; and hotels, cafés and restaurants.

Inflation increased for the fourth consecutive month, from 15.4% in June to 15.8% in July, fueled by the depreciation of the currency and an unfavorable base effect. In addition, core inflation ticked up from 14.6% to 15.1%, while annual average inflation rose from 11.5% to 12.0%.

Looking ahead, inflation is likely to rise further in the near term, due to the pass-through effects of the weaker lira and elevated inflation expectations. Price pressures should gradually ease next year on softening domestic demand, although the extremely volatile currency remains a key source of uncertainty to the inflation outlook.

Last month, FocusEconomics panelists saw inflation closing 2018 at 13.9% and 2019 at 10.1%. The panelists are currently assessing the latest developments, with a new Consensus Forecast to be published on 4 September. The next Consensus is likely to see a notable upgrade to inflation forecasts.


Author:, Economist

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Turkey Inflation July 2018

Note: Year-on-year and month-on-month variation of consumer price index in %.
Source: Turkish Statistical Institute (TurkStat).


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