Turkey: Inflation soars in June
July 3, 2013
In June, consumer prices added 0.76% over the previous month. The print marks an acceleration over the 0.15% rise seen in the previous month and overshot market expectations of a 0.10% increase. According to the statistical office, the result mostly reflected higher prices for education, food and non-alcoholic beverages as well as for transportation. As a result, annual inflation jumped from 6.5% in May to 8.3% in June, which marks the highest rate observed since September 2012.
The core inflation index, which excludes more volatile categories such as unprocessed food and energy, rose 0.37% over the previous month (May: +1.15% month-on-month). Nevertheless, in June, annual core inflation remained at May'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 6.7%, 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.