Turkey: Inflation spikes to nearly nine-year high in April
May 3, 2017
Consumer prices In Turkey increased 1.31% compared to the previous month in April. The figure was above the already sizeable 1.02% rise registered in March and matched analysts’ expectations of a 1.30% jump. According to the Turkish Statistical Institute, the rise was due to soaring prices for clothing and footwear, and food and non-alcoholic beverages.
The pass-through effect of the weakened lira has been felt since the end of 2016, driving inflation to multi-year highs. Inflation accelerated from 11.3% in March to 11.9% in April, the highest reading since October 2008. Annual average inflation rose from February’s 8.2% to 8.7%, a near-two-year high.
However, the lira has made gains in recent weeks, aided by the Central Bank’s tightening stance and increased investor appetite for emerging market assets. As a result, upward price pressures are expected to lose momentum in the months to come, which will drive inflation lower toward year-end.