Inflation in Turkey
Turkey - Inflation
Inflation reaches one-year low in June
Consumer prices were largely unchanged from the prior month in June. The consumer price index rose a tepid 0.03% month-on-month, which was down from the 0.95% increase logged in May and marked the softest monthly price increase in the year-to-date. Moreover, the figure reflected weaker utilities and transportation price pressures, despite upward trending oil prices in June. June’s print also saw a noticeable softening of alcoholic beverages and tobacco costs, while food and non-alcoholic beverages prices continued to decrease.
Inflation, meanwhile, dropped to 15.7% in June from 18.7% in May and constituted a one-year low after last year’s currency crisis saw inflation rise to a series high of 25.2% in October. Core inflation, which excludes volatile price items such as energy and food, fell to 14.9% in June from 15.9% in the prior month amid tight monetary policy and feeble domestic demand.
Commenting on the June release, Muhammet Mercan, chief economist at ING Turkey, pointed out that while inflation continued its downward path, “the large base effect helps too, given that the 2018 figure was the highest June number since the start of the current CPI series in 2003.”
Looking ahead, inflation should continue moderating in the second half of the year chiefly due to a supportive base effect owing to the currency crisis in H2 2018. However, July inflation will likely increase, as Mercan pointed out that “the expiring special consumption tax cuts and electricity price hikes hint at another likely uptick.” Moreover, currency volatility will remain a key risk to the inflation risk.
FocusEconomics Consensus Forecast panelists expect consumer price inflation to end 2019 at 14.9% and 2020 at 11.2%.
Turkey - Inflation Data
|Inflation Rate (CPI, annual variation in %)||7.5||8.9||7.7||7.8||11.1|
5 years of economic forecasts for more than 30 economic indicators.
Turkey Inflation Chart
Source: Statistical Institute and FocusEconomics calculations.
|Bond Yield||16.54||-0.09 %||Jul 11|
|Exchange Rate||5.67||-0.85 %||Jul 11|
|Stock Market||99,406||1.41 %||Jul 11|
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July 12, 2019
Turkish industrial production fell 1.3% year-on-year in May, improving from the revised 3.8% drop in April (previously reported: -4.0% year-on-year); annual average industrial output contracted 3.1% in May, down from the 2.5% fall in April.
July 11, 2019
Turkey posted its first current account surplus in six months in May, as the balance swung from a USD 1.3 billion deficit in April to a USD 151 million surplus.
July 3, 2019
Consumer prices were largely unchanged from the prior month in June.
July 1, 2019
The Istanbul Chamber of Industry and IHS Markit’s manufacturing Purchasing Managers’ Index (PMI) rose to 47.9 in June from 45.3 in May; while business conditions in the sector deteriorated for the 15th month running, they did so at the softest pace since July 2018.
June 24, 2019
After a brief stint in pessimistic territory in May, business confidence among Turkish firms moved back into optimistic territory, suggesting that the dip in confidence was influenced by the cancellation of the Istanbul mayoral election.