Turkey: Inflation edges down in April
Consumer prices rose 1.69% month-on-month in April in Turkey, up from March’s 1.03% increase. The latest outturn came in below market expectations of a stronger monthly price increase of 1.90%. April’s month-on-month rise in consumer prices was driven by a stronger uptick in prices for transportation, and housing, water, electricity, gas and other fuels. While alcoholic beverages and tobacco also became significantly more expensive, prices for food and non-alcoholic beverages rose at a softer pace.
Inflation, meanwhile, edged down from 19.7% in March to 19.5% in April, the lowest reading since August 2018. Core inflation, excluding more volatile price items such as energy and food, eased to 16.3% from 17.5% in March and continued its downward trend on the back of plummeting domestic demand.
Despite still-high inflation, the Central Bank removed its tightening bias from its forward-looking guidance at its 26 April meeting. This was initially viewed as opening the door to a premature easing cycle. However, the governor of the Central Bank has since clarified the Bank’s position, making clear that further monetary tightening is still not out of the question.