Published on Wednesday, November 3, 2021 | Updated on Wednesday, November 3, 2021

Turkey | Core inflation came down to 16.8%

Consumer prices increased by 2.39% in October surprisingly lower than expectations, resulting in an annual inflation of 19.89% up from 19.58% the month before. We expect consumer inflation to be 19.5% at the end of the year, with risks clearly on the upside.

Key points

  • Key points:
  • Food inflation surprisingly remained moderate (1.9% mom, 27.9yoy) on the back of record low fresh fruit and vegetable prices (2% mom) compared to over 8% mom seasonal average.
  • Core prices inflation surprised on the downside in contrast to increased push factors, robust demand and faster currency depreciation.
  • Energy prices accelerated with 4.6% mom (of 25.8% yoy) increase led by higher commodity prices, recent currency depreciation and price hikes, where we would expect further deterioration.
  • Domestic producer prices rose by 5.2% and 46.3% in annual terms, which will likely accelerate further due to strong energy prices and recent depreciation of the currency.
  • Considering global supply side restrictions, currency depreciation and cost push factors accompanied with still robust demand, risks remain clearly on the upside for inflation outlook.

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