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The CBRT maintained the policy rate at 17% in line with the expectations. It also underlined the decisive maintenance of the tight stance “for an extended period of time” until strong indicators point to a permanent fall in inflation and price stability. We expect the policy rate to be 14% at the end of 2021.
January 15, 2021
Global | The COVID-19 impact on Consumption in Real Time and High Definition: Jan 15th
The COVID-19 impact on consumption was much more intense during the first wave than in the rest of the year 2020. By sector of activity, the impact of Covid-19 has been heterogeneus too. Food and health was the most beneffited ones and tourism related sectors the most damaged.
Industrial Production (IP) grew by 11% yoy in cal. adj. terms in November, confirming a growth level in the first 2 months of 4Q20 (9%) similar to the strong 3Q20 performance (8.5%). We expect GDP growth to materialize near 5% in 2021, benefiting from a sizable contribution from external demand.
Consumer prices increased by 1.25% in December, leading the annual inflation to reach 14.6% up from 14% in November. We expect inflation to increase till May 2021 before a gradual disinflation path thereafter and end the year at 10.5% helped by sizable positive base effects in 4Q21.
The Central Bank of Turkey raised the policy rate by 200bps to 17%, exceeding the median expectation (150bps). Adopting a medium term perspective against inflation and taking the end-2021 forecast target (9.4%) as guidance confirm the decisiveness of the CBRT to initiate a disinflation process as soon as possible.
December 17, 2020
Global | The COVID-19 impact on Consumption in Real Time and High Definition: Dec 17th.
The Covid-19 impact on consumption has been significant in 2020 with uneven recovery paths and sectorial effects by country. Consumption growth rates moderated during December in most of the countries given the second wave and some new restrictions. The impact of this second wave is different from the first one.
Industrial Production (IP, cal. adj.) grew by 10.2% yoy in October, confirming the continuation of strong growth at the start of 4Q. 2020 GDP growth will likely get close to 1%. We still expect 2021 GDP growth to materialize near 5% backed by the expected decline in risk premium and favorable base effects.
Consumer prices increased by 2.30% in November, leading the annual inflation to reach 14.03% up from 11.9% in October. Cost push factors continued to weigh on the upside as domestic producer prices rose by 4% mom. After today's spike, we expect inflation to end 2020 at near 14% and maintain 2021 year-end forecast at 11%.