September 3, 2014

In August, consumer prices increased 0.09% over the previous month, which was well below the 0.45% rise recorded in July. The print represented the lowest rate since November 2013 and defied the 0.10% drop that market analysts had expected. According to the statistical office, the lower reading was primarily the result of a decline in prices for clothing and footwear as well as for alcoholic beverages and tobacco. Annual inflation increased from 9.3% in July to 9.5% in August.



The core inflation index, which excludes more volatile categories such as unprocessed food and energy, rose 0.08% in August over the previous month (July: +0.56% month-on-month). Annual core inflation inched down from 10.0% in July to 9.9% in August.

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.