Turkey: Inflation eases in March
Consumer prices rose 0.57% month-on-month in March, up from the 0.35% increase in February and fractionally above market expectations of a 0.55% rise. The print was driven by more expensive health; food and non-alcoholic beverages; and housing, water, electricity, gas and other fuels. This more than offset cheaper transportation costs.
Inflation, meanwhile, eased from 12.4% in February to 11.9% in March, marking the first drop after four months of rising price pressures. Annual average inflation also moderated, from 13.9% in February to 13.3% in March. Lastly, core inflation rose to 10.5% from 10.0% in February.
Looking ahead, inflation is expected to moderate by year-end owing to softer economic momentum amid the Covid-19 pandemic. However, the government’s focus on achieving high economic growth with cheap credit and looser monetary policy, and continued depreciation of the lira are upside risks.