Turkey Inflation January 2016

Turkey

Turkey: Wage hike pushes inflation in January to a 20-month high

February 3, 2016

In January, consumer prices rose 1.82% over the previous month, which followed December’s 0.21% increase. The print represented a 15-month high and beat the 1.70% increase that market analysts’ had expected. According to the statistical office, January’s increase came on the back of much higher prices for alcoholic beverages and tobacco mainly as government increased taxes on cigarettes and alcoholic drinks at the beginning of the year. Electricity prices were also increased in January, while, overall, prices were affected by the recent increase in the minimum wage.

Inflation rose from December’s 8.8% to 9.6% in January, which represented the highest rate since May 2014. The core prices index, which excludes more volatile categories, such as unprocessed food and energy, increased 1.07% in January over the previous month (December: +0.04% month-on-month). Core inflation rose from 9.1% in December to 9.6% in January, hitting a 17-month high.

Turkey’s Central Bank forecasts inflation to be 7.5% at the end of 2016 and 6.0% in 2017. FocusEconomics panelists expect inflation to close 2016 at 7.5%, which is up 0.1 percentage points from last month’s forecast. For 2017, the panel sees inflation moderating to 6.8% by year-end.


Author: Ricard Torné, Head of Economic Research

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Turkey Inflation January 2016

Note: Year-on-year and month-on-month variation of consumer price index in %.
Source: Turkish Statistical Institute (TurkStat).


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