Turkey: Inflation reaches near 20-year high in February
Consumer prices increased 4.81% in February over the previous month, below January’s 11.10% increase. The print reflected marked increases for food and non-alcoholic beverages, furnishing and household equipment, and health services. Furthermore, the sequential moderation in consumer prices increases partly reflected the front-loading and faster pass-through to prices in the previous two months, following renewed currency volatility in the fourth quarter of last year.
Inflation came in at 54.4% in February, which was up from January’s 48.7%. February’s figure marked the highest print since March 2002, and surpassed market analysts’ expectation of somewhat less sharp inflation. Meanwhile, the trend pointed up, with annual average inflation coming in at 26.0% in February (January: 22.6%). Finally, core inflation rose to 44.1% in February, from January’s 39.5%.
The outlook for inflation remains grim, with the Russia–Ukraine war’s impact on global commodity prices posing a great upside risk. Analysts at Goldman Sachs added:
“Going forward, we expect inflation to rise further, exceed 60.0% in April, peak around 65.0% in May-June and only fall to 45.0% yoy […] by the end of the year. […] We also see upside risks from commodity prices and the monetary policy stance which is not geared to fighting inflation.”
The outlook for inflation remains grim, with the Russia–Ukraine war’s impact on global commodity prices posing a great upside risk. Analysts at Goldman Sachs added:
“Going forward, we expect inflation to rise further, exceed 60.0% in April, peak around 65.0% in May-June and only fall to 45.0% yoy […] by the end of the year. […] We also see upside risks from commodity prices and the monetary policy stance which is not geared to fighting inflation.”