Turkey: Inflation moderates sharply
December 3, 2012
In November, consumer prices added 0.38% over the previous month. The reading was well below the 1.96% rise recorded in October and also undershot market expectations of a 0.90% increase. As a result, annual inflation dropped from 7.8% in October to 6.4%, its lowest level in over a year. The monthly price rise mainly reflected a sharp increase in prices for clothing and footwear, which was only partially offset by a decline in prices for food and non-alcoholic beverages.
The core inflation index, which excludes more volatile categories such as unprocessed food and energy, added 0.84% over the previous month (October: +1.23% month-on-month). As a result, annual core inflation dropped from 6.6% in October to 6.0% in November, its lowest level in 16 months. The Central Bank of Turkey (CBRT) sees inflation ending the year at 7.4% and moderating to 5.3% by the end of 2013. The official inflation target, however, remains at 5.0% for both years.