Published on Tuesday, March 3, 2020 | Updated on Tuesday, March 3, 2020

Turkey | February CPI surprised on the downside

Consumer prices increased by 0.35% in February, lower than expectations (consensus, 0.69% vs ours, 0.85%). Annual figure still rose to 12.37% on base effects. We expect inflation to be 8.5% at the end of 2020 under the assumptions of a neutral real exchange rate and a food inflation at historically seasonal averages

Key points

  • Key points:
  • Better than expected realization mainly stemmed from the core prices.
  • Core prices declined by 0.2%, supported by a widespread ease in basic goods especially coming from the seasonal factors in clothing prices.
  • Domestic producer prices increased to 9.3% from 8.8% in January and somewhat refreshed cost-push factors.
  • Recent high volatility fueled by both local and external factors, uncertainties on the implications from the outbreak, stickiness on inertia and inflation expectations remain to be the challenging factors.
  • We maintain our year-end inflation forecast at 8.5% for 2020.



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