Turkey: Inflation jumps to one-year high in October
November 3, 2011
In October, consumer prices jumped 3.27% over the previous month, which overshot the 2.7% increase expected by market analysts, and marked the largest gain in nine years. The monthly reading came in well above both the 0.75% increase in September and the 1.83% increase tallied in October 2010. As a result, annual inflation jumped from 6.2% in September to 7.7% in October, the highest level since October 2010, and well above the Central Bank's target. The monthly increase reflected surging prices for alcoholic beverages and tobacco, due to a tax increase, as well as higher food and non-alcoholic beverage prices. The core inflation index, which excludes more volatile categories such as unprocessed food and energy, rose 2.55% over the previous month. Annual core inflation jumped from 7.4% in September to 9.1%, the highest level seen since October 2008. According to its October Inflation Report, the Central Bank of Turkey (CBT) sees year-end inflation at 8.3% for 2011 and 5.2% for 2012. The official year-end inflation target remains at 5.5% for this year and at 5.0% for 2012.