August 4, 2014

In July, consumer prices increased 0.45% over the previous month, which was above the 0.31% rise recorded in June. According to the statistical office, the increase was primarily the result of higher prices for recreation and culture as well as for alcoholic beverages and tobacco. Annual inflation increased from 9.2% in June to 9.3% in July. The print overshot market expectations of the index slowing to an 8.8% increase.



The core inflation index, which excludes more volatile categories such as unprocessed food and energy, rose 0.56% over the previous month in July (June: +0.38% month-on-month). Annual core inflation inched up from 9.6% in June to 10.0% in July, which marked the highest reading since October 2008.

The Central Bank of Turkey (CBRT) sees inflation ending 2014 at 7.6% before slowing to 5.0% at the end of 2015. The Bank’s official inflation target remains at 5.0%. FocusEconomics panelists expect inflation to close 2014 at 8.3%, which is up 0.3 percentage points from last month’s forecast. For 2015, the panel sees inflation moderating to 6.7% by year-end.