Turkey: Inflation hits 10-month high in July
August 5, 2013
In July, consumer prices added 0.31% over the previous month. The print marks a deceleration over the 0.76% rise seen in the previous month but was broadly in line with market expectations of a 0.33% increase. According to the statistical office, the increase was mostly due to higher prices for transportation and communication. As a result, annual inflation rose from 8.3% in June to 8.9% in July, which marks the highest rate observed since September 2012.
The core inflation index, which excludes more volatile categories such as unprocessed food and energy, rose 0.18% over the previous month (June: +0.37% month-on-month) driving annual core inflation to rise to 6.9%, up from 6.6% in June.
The Central Bank of Turkey (CBRT) sees inflation ending 2013 at 6.2%, before decelerating to 5.0% in 2014. The official inflation target, however, remains at 5.0%. FocusEconomics panellists expect inflation to close this year at 6.8%, which is up 0.2 percentage points from last month's forecast. For 2014, the panel sees inflation moderating to 6.1% by year-end.