Turkey Inflation


Turkey: Inflation ends 2015 at the highest level in 13 months

January 4, 2016

In December, consumer prices rose 0.21% over the previous month, which followed November’s 0.67% increase and marked a five-month low. The rise beat the 0.10% increase that market analysts’ had expected. According to the statistical office, December’s increase came on the back of higher prices for food and non-alcoholic beverages as well as for furnishings and household equipment. While food prices and continued exchange-rate pass through are keeping inflation at high levels, the increase in Turkey’s minimum wage promises to fuel inflationary pressure in the coming months.

Inflation rose from November’s 8.1% to 8.8% on December, which represented the highest rate since November 2014. The core prices index, which excludes more volatile categories, such as unprocessed food and energy, increased 0.04% over the previous month in December (November: +0.72% month-on-month). Core inflation rose from 8.8% in November to 9.1% in December, hitting a 12-month high.

Turkey’s Central Bank forecasts inflation to be 7.9% at the end of 2015 and 6.5% in 2016. FocusEconomics panelists expect inflation to close 2015 at 8.1%, which is unchanged from last month’s forecast. For 2016, the panel sees inflation moderating to 7.4% by year-end, which is up 0.3 percentage points from the previous month’s estimate.

Author: Ricard Torné, Lead Economist

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Turkey Inflation Chart

Turkey Inflation December 2015

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

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