Turkey Inflation


Turkey: Inflation jumps to 25-month high in May

June 4, 2014

In May, consumer prices increased 0.40% over the previous month, which was well below the 1.34% rise recorded in April. The print undershot the 0.70% increase that market analysts had expected. According to the statistical office, the increase was primarily the result of higher prices for clothing and footwear as well as for hotels, cafes and restaurants. Annual inflation increased from 9.4% in April to 9.7% in May, which marked the highest level since April 2012.

The core inflation index, which excludes more volatile categories such as unprocessed food and energy, rose 1.26% over the previous month in May (April: +1.71% month-on-month). Annual core inflation inched up from 9.4% in April to 9.6% in May, which marked the highest reading in over two years.

The Central Bank of Turkey (CBRT) sees inflation ending 2014 at 7.6% before slowing to 5.0% by the end of 2015. The Bank’s official inflation target remains at 5.0%. FocusEconomics panelists expect inflation to close 2014 at 8.3%, which is up 0.3 percentage points from last month’s forecast. For 2015, the panel sees inflation moderating to 6.7% by year-end.

Author: Ricard Torné, Lead Economist

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