Turkey Inflation Likely Inched Up Amid Commodity Price Pressures
(Bloomberg) -- Turkish inflation likely quickened for a fourth month on last year’s lira downswing and a rise in international commodity prices, though seasonal volatility in food prices led a sizable minority of analysts to pencil in a drop in the gauge.
While the new central bank governor boosted his credibility among investors by raising the policy interest rate by 675 basis points since November, prices mean Turkey still faces pressure to maintain a tight policy stance. Data due Wednesday will show consumer prices rose an annual 14.7% in January, a slight uptick from the previous month, according to the median of 21 forecasts in a Bloomberg survey.
Price-growth data for Turkey’s biggest city, Istanbul, and the capital, Ankara, suggest that food inflation may be slower than seasonal averages and its high base in 2020, according to Evren Kirikoglu, an independent market strategist in Istanbul.
“This increases downside risks on our January inflation estimate of 15.1%,” but an upside surprise is still possible considering the hikes in electricity, natural gas and water prices, he said.
14 analysts surveyed expect prices accelerated, while five think they slowed.
Retail prices in Istanbul rose 1.16% in January from the previous month, according to the city’s Chamber of Commerce. Its annual retail inflation accelerated to 15.05% from 14.4% in December.
Governor Naci Agbal’s next rate-setting meeting is scheduled for February 18.
©2021 Bloomberg L.P.