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Turkey Inflation June 2024

Turkey: Inflation decreases in June

Inflation eased to 71.6% in June from May’s 75.4%. The print marked the first fall in eight months and surprised markets on the downside, which were expecting a smaller decline. The slowdown was largely due to a slower rise in prices for food and non-alcoholic beverages. In addition, price pressures for transport softened. Moreover, prices for restaurants and hotels grew at a more subdued pace.

Annual average inflation rose to 65.1% in June (May: 62.5%). Meanwhile, core inflation fell to 71.4% in June from May’s 75.0%.

Lastly, consumer prices rose 1.64% in June over the previous month, a smaller increase than May’s 3.37% increase. June’s result marked the weakest reading since May 2023.

Our Consensus is for inflation to decline further in H2 due to past monetary tightening and a high base of comparison.

Clemens Grafe and Basak Edizgil, analysts at Goldman Sachs, commented on the outlook:

“While we expect some acceleration in sequential inflation in July due to regulatory changes and some normalisation in core goods inflation, we think underlying inflation will continue to weaken in H2 as expectations adjust further with the sharp decline in headline inflation on base effects.”

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