Turkish central bank expects inflation to rise further in September

By bne IntelliNews September 28, 2015

Inflation is expected to rise further in September due to exchange rate effects and the volatility in unprocessed food prices, the Central Bank of Turkey said on September 23 in a presentation to economists, adding that it maintains a tight policy stance to address the inflationary risks from the exchange rate pass-through and higher inflation expectations.

CPI inflation in Turkey generally picks up in September due to rising demand as a result of the launch of the school term and preparations for the winter season, however, the Central Bank also addresses exchange rate effect and food prices this time. The annual inflation advanced to 7.14% in August from 6.81% in July on the back of high food prices, while core inflation indicators deteriorated, reflecting the adverse effects of the weaker currency. Consumer prices are expected to increase by 0.59% m/m in September, the central bank’s monthly expectations survey showed on September 18.

The central bank also expects the contribution of net exports to pick up in the second half with the support of rising demand from the European Union economies. The improvement in the current account balance will resume with the August figure and will most likely continue throughout 2015, the Central Bank said, adding that the favorable impact of lower oil prices on the current account balance will be more pronounced in the forthcoming period. The Central Bank also commented that consumer confidence indicators point to a deceleration in the private consumption for the second half, however, the recovery in export orders is expected to limit the slowdown in the economic activity. The Central Bank expects some deceleration in employment in the second half.

August CPI by Main Expenditure Groups (%)
  Weights m/m y/y
Headline 100 0.40 7.14
Food and non-alcoholic beverages 24.25 1.31 9.71
Alcoholic beverages and tobacco 4.82 0.36 4.13
Clothing and footwear 7.38 -4.32 4.72
Housing, utilities 15.79 0.35 8.19
Furnishings, household equipment 7.78 0.23 8.60
Health 2.57 0.37 6.72
Transportation 15.38 -0.38 0.60
Communications 4.38 0.97 2.03
Recreation and culture 3.54 1.96 9.19
Education 2.53 1.41 6.84
Hotels, cafes and restaurants 6.98 2.05 14.26
Miscellaneous goods and services 4.60 1.21 9.91
Source: tuik      

Related Articles

Spooked Turkish textile exporters fear missing target due to Berlin's Turkey travel warnings

Some German buyers have cancelled trips to Turkey after the rise in political tension between Ankara and Berlin, Seref Fayat, head of the Turkish Clothing Manufacturers Association, said on July 25, ... more

Turkey reportedly set to raise debt limit for first time in 8 years as Ankara fuels credit

Turkey is preparing to raise its debt limit for the first time since 2009 after first-half borrowing left the Treasury near its legal ceiling, Bloomberg reported on July 25. Citing a person with ... more

Four Turkish companies reportedly consider IPOs in London or Istanbul

Turkey’s Enerjisa, Memorial Health Group, Tab Gida and Baskent Gaz are considering public offerings in London or Istanbul, unnamed sources told Bloomberg on July 19. Enerjisa, a 50:50 JV ... more

Dismiss