SAWT BEIRUT INTERNATIONAL

| 19 June 2024, Wednesday |

Turkish inflation rises to 61.53% in September, near forecast

Turkish annual consumer price inflation climbed to 61.53% in September, official data showed on Tuesday, just below expectations and rising for a third consecutive month in response to recent tax hikes and lira weakness.

Month-on-month, consumer price inflation was 4.75%. In a Reuters poll, annual inflation was expected to rise to %61.7.

Inflation soared above 85% last year after an aggressive rate-cutting cycle sparked a historic currency crash in late 2021. But after winning May elections, President Tayyip Erdogan reversed course and named a new economic team to embrace more orthodox policies including aggressive monetary tightening.

The lira, under less state control, has fallen some 26% since the vote and was 0.2% weaker on the day at 27.5005 to the dollar. Inflation is seen climbing to about 70% by year end and reaching 75% around May of next year before cooling, economists and the government say.

Last month the central bank raised its key interest rate by 500 basis points to 30%, tightening policy for four straight months. Since the June policy U-turn, it has hiked rates by 2,150 basis points to rein in inflation.

Following the change in policy, S&P Global Ratings revised its outlook on Turkey to “stable” from “negative” last week, citing moves to cool an overheated economy and stabilize the exchange rate.

Hafize Gaye Erkan, the central bank governor Erdogan named in June, is set to address parliament later on Tuesday.

The domestic producer price index was up 3.40% month-on-month in September for an annual rise of 47.44%, according to the data from the Turkish Statistical Institute.

 

    Source:
  • Reuters