Turkey: Inflation rebounds in May from a two-year low
June 3, 2013
In May, consumer prices added 0.15% over the previous month. The print marks a deceleration over the 0.42% rise seen in the previous month and undershot market expectations of a 0.51% increase. According to the statistical office, the result mostly reflects higher prices for clothing and footwear, which were partially offset by lower prices for food and non-alcoholic beverages. As a result, annual inflation rose in May to 6.5% from 6.1% in April, which had represented the lowest reading seen since April 2011.
The core inflation index, which excludes more volatile categories such as unprocessed food and energy, jumped 1.15% over the previous month (April: +1.24% month-on-month). Nevertheless, in May, annual core inflation remained at April's 6.6%.
The Central Bank of Turkey (CBRT) sees inflation ending 2013 at 5.3%, before decelerating to 4.9% in 2014. The official inflation target, however, remains at 5.0%. FocusEconomics panellists expect inflation to close this year at 6.6%, which is up 0.1 percentage points from last month's forecast. For 2014, the panel sees inflation moderating to 6.0% by year-end.