Economy

Turkey's inflation rate drops in April amid COVID-19

Annual inflation in April at 10.94%, down from 11.86% in previous month, TurkStat data shows

Tuba Sahin   | 04.05.2020
Turkey's inflation rate drops in April amid COVID-19

ANKARA

Consumer prices in Turkey went up 10.94% in April compared to the same month last year, the country's statistical authority announced Monday.

April's annual inflation rate was down from 11.86% in March amid coronavirus, Turkish Statistical Institute (TurkStat) data showed.

A group of 19 economists polled by Anadolu Agency last week predicted annual inflation figure to drop to 10.79% in April.

The lowest annual price increase was registered in communication with 1.55% in April, while the highest rise was in alcoholic beverages and tobacco with 31.32%.

Last month, the consumer price index saw a rise of 0.85% on a monthly basis.

Ferhat Yukselturk, managing partner of eCons Consulting, told Anadolu Agency that the booming food demand and measures implemented against the pandemic drove the inflation rate above expectations.

Economists expected a 0.72% monthly rise in consumer prices index, ranged between 0.17%, at its lowest, and 1.4%, at its highest.

The miscellaneous goods and services with 4.66% and clothing and footwear with 4.08% posted the highest monthly price increases.

The data showed that the highest monthly decrease was 1.83% in transportation sector.

Yukselturk underlined that the falling oil prices and demand have limited upward movement in inflation for transportation. 

TurkStat data also showed that the 12-month average hike in consumer prices was 12.66% as of April. 

Last week, Turkey's Central Bank revised its year-end inflation forecast to 7.4% for 2020, down from 8.2%, thanks to a cut in projections of the output gap and food inflation.

The government's year-end inflation target is 8.5% for 2020.

"Core inflation figures, unfortunately, are still at high levels due to the weakness of the Turkish lira," Yukselturk said, adding that it was difficult to make any predictions before the effects of the virus completely fade away.

The value of Lira will be decisive on the inflation beside sustainability of food supply chain, he concluded.

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