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Turkish Inflation Fares Better Than Expected on Housing, Clothes
Turkish Inflation Fares Better Than Expected on Housing, Clothes
05 Oct 2020, 02:03 PM IST
(Bloomberg) -- Turkey’s consumer inflation was little changed for a second month in September as slowing price gains in housing and apparels offset the impact from a weak lira.
(Bloomberg) -- Turkey’s consumer inflation was little changed for a second month in September as slowing price gains in housing and apparels offset the impact from a weak lira.
Prices last month rose 11.75% from a year earlier, less than all forecasts in a Bloomberg survey where the median estimate was 12.13%. Consumer prices advanced a monthly 0.97% in Sept., Turkey’s statistics agency, or Turkstat, said Monday.
Key Insights
- Food costs, which make up just over a fifth of the consumer goods basket, rose an annual 14.95%, up from 13.5% last month. Food inflation remains above the official year-end estimate of 10.5%
- Energy inflation, a key driver of broader price pressures, was 6.77%, down from 9.6% in August
- The two biggest forces that slowed inflation were housing and apparels, where annual price gains decelerated to 10% and 6.91%, from 11.34% and 9.22%, respectively
- Core inflation -- which strips out volatile items such as food and energy -- climbed to 11.32% from 11% previous month, a sign that some of the underlying cost pressures may be increasing
Markets
- Turkey’s currency was little changed after the data release and traded 0.3% stronger at 7.7539 per dollar as of 10:30 a.m. in Istanbul
- The lira reached historic lows and depreciated 4.8% against the dollar in September, making it the worst performing emerging markets currency. It’s down more than 23% for the year
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- The government predicts that inflation will slow to 10.5% by year-end and to 8% by end-2021, Treasury and Finance Minister Berat Albayrak said last week
- Retail prices in Istanbul, the country’s largest city, rose 1.47% on a monthly basis and an annual 11.66% in Sept.
- The Turkish central bank’s next rate-setting and inflation report meetings are scheduled for Oct. 22 and Oct. 28, respectively
©2020 Bloomberg L.P.
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