Turkey | May CPI confirms upside risks on inflation

Summary

Consumer prices increased by 1.36% in May. Therefore, annual inflation accelerated to 11.39% from 10.94% in April. Depending on the food inflation and the level of exchange rate, headline inflation could stay close to 12% in June before converging to 9% towards the end of 3Q and ending the year at near 8.5%.

Key points

• Key points:
• Consumer prices increased sizably higher than both consensus and our expectation in May.
• The upside surprise stemmed mainly from the core prices.
• Seasonally higher unprocessed food inflation continue to push the headline on the upside.
• Energy prices started to correct faster than expectations during May.

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