Turkey's official inflation edges down to 61% y/y in October

Turkey's official inflation edges down to 61% y/y in October
*ENAG is an Istanbul-based inflation research group that calculates alternative readings of inflation in Turkey. / bne IntelliNews
By Akin Nazli in Belgrade November 4, 2023

Turkey’s official consumer price index (CPI) inflation stood at 61% y/y in October versus 62% y/y in September and 38% y/y in June, the Turkish Statistical Institute (TUIK, or TurkStat) said on November 3 (chart).

At 61%, Turkey is in sixth place in the world inflation league. Turkey’s closest 'rival' is Sudan, which released a 63% y/y inflation rate for February (the latest data provided).

The Istanbul-based ENAG inflation research group of economists, meanwhile, calculated a Turkish inflation figure of 126% y/y for October. The ENAG figure calculated for September was 130% y/y, while for June it was 109% y/y.

TUIK also gave an official figure of 39% y/y for producer price index (PPI) inflation in October.

Following the elections held in May, another wave of currency depreciation coupled with widespread tax hikes dynamited pricing behaviour in the country once again.

In June, following the appointment of Turkey’s post-election new economic team, the central bank's monetary policy committee (MPC) launched its ongoing tightening process, taking the policy rate to 35% in October from 8.50% in June.

The next MPC meeting is scheduled for November 23. As things stand, it seems another 500bp is on the way.

On November 2, the central bank hiked its forecast for end-2023 official inflation to 65% from the 58% given in the July inflation report. Also, the upper boundary was moved up from 62% to 68%.

Moreover, the central bank currently anticipates that official inflation may peak at just below the 80%-level in May 2024, up from the 70% projection given in July.

Chart: The central bank’s inflation expectations.

The chart shows that the upper reach of the prediction interval could approach the 80%-level, while central bank governor Hafize Gaye Erkan said during her press conference that the official inflation series would peak at 70-75% in May.

On February 8, the central bank will release its next inflation report and updated inflation forecasts.

Looking at the global markets, there is no turbulence of note impacting sentiment. The US Treasury yields, which were sailing through the 6%s across the curve, are currently taking a breather around the 5%-level.

The USD Index (DXY) fell into the 105s after pushing through the 107-level, still up from the 99s seen in July.

The USD/TRY rate is, meanwhile, still heading north. On September 21, the pair once again broke through the horizontal barrier set at the 27.00-level. The latest record high, registered on November 3, is 28.5666.

The Turkish government’s ‘five/10 kurus (Turkish cents, pronounced as kurush) devaluation per day policy’ in the struggle to stop the slide is still in place. As of November 3, the latest daily trench was dug around the 28.40-level, up 3% m/m and 52% y/y.

Following the local elections to be held in March, Turkey’s policy rate will reach its peak. The finance industry will then be welcomed in for the rate-cutting party.

Read in IntelliNews Pro
Get IntelliNews Pro

Related Content

Turkey’s net reserves recover to minus $57bn

COP28: Greenpeace asks if nine European oil and gas majors are “getting away with murder”

JPMorgan EM Debt Fund buys in $2mn of Turk Eximbank’s eurobond due 2027

Data

BOFIT: Russian inflationary pressures on the rise

Russia’s strong growth, driven by heavy military spending, has created growing inflationary pressure as the economy starts to overheat, the Bank of Finland institute for Emerging Economies (BOFIT) says in its weekly update.

Putin's trust rating holds steady at 78.5% in latest poll

In the most recent poll conducted by the Russian Public Opinion Research Center (VTsIOM), President Vladimir Putin's trust rating remained steady at 78.5%.

Dragon Capital halves Ukraine’s 2024 GDP forecast to 4% in anticipation of another year of war

Ukraine’s leading investment bank Dragon Capital has cut its GDP forecast for Ukraine in 2024 in half to 4% y/y in anticipation of another year of war, The New Voice of Ukraine reported on December 7.

Czech industry increased by 1.9% y/y in October

Czech industrial production increased by 1.9% year on year and by 2.8% month on month in October. The October increase follows a 5% slump registered in September, which alarmed local analysts.

Turkey’s net reserves recover to minus $57bn

Since 2018, economy has carried risk of severe balance of payments crisis. For the removal of that risk, the central bank’s net in and off-balance sheet FX position should at least turn positive.

BOFIT: Russian inflationary pressures on the rise
1 hour ago
Putin's trust rating holds steady at 78.5% in latest poll
2 hours ago
Dragon Capital halves Ukraine’s 2024 GDP forecast to 4% in anticipation of another year of war
5 hours ago
Czech industry increased by 1.9% y/y in October
5 hours ago
Turkey’s net reserves recover to minus $57bn
21 hours ago

Follow Us On

Most Read

  1. LONG READ: The boomerang effect: sanctions hurt Europe more than Russia
    6 days ago
  2. Putin's approval rating up to 85% in November, Russians happy with the country's direction
    4 days ago
  3. Oil continues to flow to Israel via Turkey despite Erdogan’s vehement speeches on plight of Gaza
    1 month ago
  4. Top Ukrainian politician David Arakhamia gives seventh confirmation of Russia-Ukraine peace deal agreed in March 2022
    11 days ago
  5. Former Kazakh leader Nazarbayev confesses to polygamy with Miss Kazakhstan 1999
    2 days ago
  1. Oil continues to flow to Israel via Turkey despite Erdogan’s vehement speeches on plight of Gaza
    1 month ago
  2. Top Ukrainian politician David Arakhamia gives seventh confirmation of Russia-Ukraine peace deal agreed in March 2022
    11 days ago
  3. Russia overtakes Germany to become fifth biggest economy in the world in GDP on a PPP basis
    4 months ago
  4. Armenia marks new era with French military purchases
    10 days ago
  5. Lavrov confirms Ukraine war peace deal reached last April, but then abandoned
    2 months ago

Reports

SELECT `n`.`nid` AS `id`, `n`.`title`, 'bne IntelliNews' AS authors, 'bne IntelliNews' AS bylines, `wc`.`field_website_callout_value` AS `summary`, `smc`.`field_social_media_callout_value` AS `social`, `pd`.`published_at` AS `date`, `p`.`field_publication__tid` AS `publication_id`, `fm`.`uri` AS `image`, `fspcaption`.`field_story_photo_caption_value` AS `image_credit`, `fspcredit`.`field_story_photo_credit_value` AS `image_author`, `ws`.`field_website_sections_tid` AS `section_id`, `fdfs`.`field_subject_tid` AS `subject_id`, `db`.`body_value` AS `body`, `fm2`.`uri` AS `pdf`, `et`.`field_enable_tracking_value` AS `tracking`, `ht`.`field_head_tags_value` AS `headTags`, `bt`.`field_body_tags_value` AS `bodyTags` FROM `node` AS `n` LEFT JOIN `field_data_field_website_callout` AS `wc` ON wc.entity_id = n.nid LEFT JOIN `field_data_field_social_media_callout` AS `smc` ON smc.entity_id = n.nid LEFT JOIN `publication_date` AS `pd` ON pd.nid = n.nid LEFT JOIN `field_data_field_publication_` AS `p` ON p.entity_id = n.nid LEFT JOIN `field_data_field_story_picture` AS `sp` ON sp.entity_id = n.nid LEFT JOIN `file_managed` AS `fm` ON fm.fid = sp.field_story_picture_fid LEFT JOIN `field_data_field_story_photo_caption` AS `fspcaption` ON fspcaption.entity_id = n.nid LEFT JOIN `field_data_field_story_photo_credit` AS `fspcredit` ON fspcredit.entity_id = n.nid LEFT JOIN `workflow_node` AS `wn` ON wn.nid = n.nid LEFT JOIN `field_data_field_website_sections` AS `ws` ON ws.entity_id = n.nid LEFT JOIN `field_data_field_subject` AS `fdfs` ON fdfs.entity_id = n.nid LEFT JOIN `field_data_body` AS `db` ON db.entity_id = n.nid LEFT JOIN `field_data_field_file` AS `ff` ON ff.entity_id = n.nid LEFT JOIN `file_managed` AS `fm2` ON fm2.fid = ff.field_file_fid LEFT JOIN `field_data_field_enable_tracking` AS `et` ON et.entity_id = n.nid LEFT JOIN `field_data_field_head_tags` AS `ht` ON ht.entity_id = n.nid LEFT JOIN `field_data_field_body_tags` AS `bt` ON bt.entity_id = n.nid WHERE (n.status = 1) AND (n.type = 'article') AND (n.nid = 299820) AND (wn.sid= 3) AND (p.field_publication__tid IN (2465,2851,3184,3159,3266,3264,3270,3265,3267,3268,3269,3171,3168,3185,3170,1346,1345,3180,3175,3254,3249,1207,1208,3181,3231,3177,3186,3178,1003,3187,2975,3204,3198,3188,3202,3196,3250,3189,3160,3161,3312,3313,3173,3314,3315,3167,3259,3257,3263,3258,3260,3261,3262,3174,3316,3165,3192,3163,3282,3190,2811,3256,3317,3162,3318,3191,3297,3182,3179,3166,3319,3376,3320,3172,3255,3169,1008,3203,3197,3321,3252,3164,1307,3322,3183,3220,3176,3201,3323,1327,1020,1006,1009,1013,1014,1018,1005,1328,1010,1011,1002,1012,1311,1330,1017,1016,1019,1004,1001,1334,1335,1336,1015,1337,1338,1339,1340,1341,2496,2501,2517,2529,2506,2505,2524,2513,2526,2537,2489,2490,2520,2536,2488,2532,2500,2515,2503,2493,2527,2523,2510,2525,2498,2499,2528,2507,2487,2511,2521,2502,2491,2519,2497,2492,2514,2495,2509,2512,1629,3358)) LIMIT 1
Dismiss