Turkey: Inflation rises in April, but remains subdued
May 3, 2011
In April, consumer prices rose 0.9% over the previous month, which was a notch below the 1.0% rise expected by market analysts. The monthly reading followed on a 0.4% increase in March and exceeded the 0.6% rise tallied in April 2010. As a result, annual inflation stepped up from the record-low of 4.0% in March to 4.3% in April. The lower-than-expected reading benefited from declining prices for food and non-alcoholic beverages (-0.5% month-on-month), which partially offset higher prices for clothing and footwear (+10.9% mom). Meanwhile, the core inflation index, which excludes more volatile categories such as unprocessed food and energy, rose a more pronounced 1.3% over the previous month, driving annual core inflation to 4.5% (March: 4.0%). According to the 28 April Inflation Report, the Central Bank lifted its year-end inflation forecast from 5.9% to 6.9% for 2011 and from 5.1% to 5.2% for 2012. However, the official year-end inflation target remains at 5.5% for this year and at 5.0% for 2012.