Annual inflation eases for third month

ANKARA

Turkey’s annual consumer price inflation rate went down for the third month in a row, the Turkish Statistical Institute (TurkStat)’s November report revealed on Monday.

Yearly inflation was 7 percent, compared to 8.10 percent in November 2015, 7.58 percent in October 2015 and 7.95 in September 2015, the institute said.

Monthly inflation was 0.52 percent in November over the previous month, lower than market expectations.

The median estimate of an inflation expectation survey prepared by Anadolu Agency’s Finance Desk had been a 0.82 percent hike on a monthly basis and 7.76 percent on an annual basis.

“Weak domestic demand helped consumer price inflation ease. In addition, better than forecasted inflation figures sourced from the fact that exchange rate pass-through effect did not reflect in inflation,” Enver Erkan, an analyst with the KapitalFX investment house, said.

“Most probably, we will see the delayed foreign exchange rate pass-through effects in 2017 figures” Erkan added.

According to the report, the highest monthly increase was in the clothing and footwear sector, with 3.89 percent. The top sub-indices in yearly consumer price inflation on an annual basis were alcoholic beverages and tobacco, rising 22.61 percent.

Despite the data showing that inflation eased for the third month in row, Erkan expected the downward momentum in consumer prices to shift back due to the hike in taxes and other goods as well as oil prices.

“We can say we saw the bottom in inflation. Starting from December there may be a start of an uptrend with effects coming from rising taxes, price increases and high oil prices.” Erkan said, forecasting an 8 percent inflation by the year end and an 8.5 to 9.5 percent inflation in the first half of 2017.