Turkey | CPI touched 70% in April

Summary

Consumer inflation increased by 7.25% mom in April, leading annual inflation to reach 70%. High commodity prices, deteriorated inflation expectations and ongoing global supply-side problems are the upside risks on our expectation anticipating inflation to hover above 70% till November before fall to 50% at the end of 2022.

Key points

• Key points:
• The upside suprising factor in April was food inflation as it rose by 13.6% mom, led annual figure to reach 91% from 71.6% in March.
• Energy prices also continued to rise by 7.5% mom, resulting in annual energy inflation to get 118% due to high commodity prices, hikes in natural gas and water prices.
• The lagged impact of exchange rate pass-thru, cost push factors, and second round effects on top of still strong demand caused core inflation to increase by 4.5% mom and upsurged annually to 52.4% in April from 48.5% in March
• Cost push factors have increased further as producer prices have risen 7.7% mom, leading annual figure to reach 121.8%.
• Worsening inflation expectations, high global commodity prices, continuing exchange rate pass through on top of still strong demand, high inertia and accelerated cost push factors would keep upside risks on the inflation outlook.

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