Turkey: Inflation eases in April, but outlook remains clouded
May 4, 2020
Consumer prices in Turkey rose 0.85% month-on-month in April, up from the 0.57% increase recorded in March. The print reflected higher prices for food and non-alcoholic beverages offsetting cheaper housing and utilities, and transportation costs.
Inflation, meanwhile, came in at 10.9%, easing from the 11.9% figure observed in March and marking the second consecutive monthly drop in price pressures. Annual average inflation decelerated to 12.7% from 13.3%. Lastly, core inflation reached 9.9%, down from the prior month’s 10.5%.
This year, inflation should continue to moderate and enter single-digit territory on the back of the economic fallout from the Covid-19 pandemic, which will weigh heavily on domestic and foreign demand. However, the balance of risks remains tilted to the upside due to potential supply chain disruption from the pandemic and the government’s focus on achieving economic growth fueled by cheap credit, which could see the Turkish lira slide further against the US dollar.
Author: Jan Lammersen, Economist