Turkey: Inflation inches down in May
Consumer prices increased 0.89% in May over the previous month, decelerating from April’s 1.68% rise. The print reflected notable increases in the prices for transportation, and clothing and footwear being partially offset by a drop in prices for recreation and culture.
Inflation came in at 16.6% in May, down from April’s 17.1%. Annual average inflation, however, rose to 14.1% in May (April: 13.7%). Core inflation came in at 17.0% in May from April’s 17.8%.
Ongoing currency weakness, exacerbated by President Erdogan’s comments that the one-week repo rate will be lowered, will continue to put upward pressure on prices, while the easing of lockdown measures from 1 June onwards should firm domestic demand and provide additional pressure. That said, while panelists expect inflation to remain elevated, they see price pressures easing from their current level.