Turkish Inflation Accelerates Amid Surge in Energy Costs
Turkey’s consumer inflation accelerated in September, driven by a surge in the cost of energy. A core gauge closely watched by the central bank also edged higher.
Prices rose an annual 19.58% through last month, up from 19.25% in August, while the median estimate in a Bloomberg survey of 22 analysts predicted an acceleration to 19.65%. Prices rose 1.25% from August, compared with the median estimate of 1.27% in a separate survey.
- Annual price gains in food, which makes up roughly a quarter of the consumer basket, was little changed at 28.79% amid weak lira, arid weather affecting harvests and supply bottlenecks.
- The rate of inflation in energy quickened to 22.77% from 20.72% in August. A tax mechanism intended to stabilize gasoline prices cushioned the spike in global energy prices in September.
- The main core index monitored by the central bank rose 22 basis points to 16.98%. Governor Sahap Kavcioglu delivered a surprise cut to interest rates last month, shortly after he highlighted the role of core prices in his forward guidance, citing transitory factors affecting headline inflation.
- The lira weakened after the report and was trading 0.1% lower at 8.8644 per dollar at 10:07 a.m. in Istanbul.
- Retail price inflation in Istanbul, Turkey’s business capital, climbed to 19.77% from 18.89% in August.
- The central bank will hold its next rate-setting meeting on Oct. 21.
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