Turkish inflation seen above 12pc again in September
- Annual inflation last stood above 12pc in June and then dipped slightly below it in the last two months.
ISTANBUL: Turkish consumer price inflation is expected to have risen above 12pc again in September, when the central bank hiked its policy rate to counter price rises, a Reuters poll showed on Wednesday.
Annual inflation last stood above 12pc in June and then dipped slightly below it in the last two months.
On Tuesday, the Finance Ministry revised its year-end inflation expectation to 10.5pc citing increased unit costs and pass-through effect from exchange rates.
The median estimate for September annual inflation in a Reuters poll of 12 economists was 12.13pc, with estimates ranging between 11.79pc and 13.00pc.
On a monthly basis, inflation was expected to be 1.35pc, with forecasts between 1.01pc and 2.10pc.
Food prices showed the largest increase in September but prices rose across the board with the impact of a weaker lira, said Is Yatirim economist Daglar Ozkan.
"We foresee the inflation trend in the final quarter to be similar to last year but October to be significantly higher due to the exchange rate," he said, adding that year-end inflation would depend on the pace of monetary tightening by the central bank.
The median estimate of eight economists for inflation at year-end was 11.70pc, above the revised estimates of both the treasury and the central bank, now at 8.9pc. Estimates ranged between 10.5pc and 13pc.
To counter sticky inflation, the central bank unexpectedly hiked its policy rate to 10.25pc last week, saying a fast recovery from the initial coronavirus shock had kept prices too elevated.
Turkey's lira has declined more than 24pc this year to a record low of 7.8555 against the dollar, which poses an upside risk to inflation due to imports priced in hard currencies.
A currency crisis in 2018 that nearly halved the lira's value at one point sent inflation rocketing to a 15-year high of more than 25pc. The lira stood at 7.7800 at 1302 GMT on Wednesday.
The Turkish Statistical Institute is scheduled to announce September inflation data on Monday, Oct. 5 at 0700 GMT.
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