Turkey's inflation data on par with expectations

Turkey’s inflation data on par with expectations

Turkey's State Institute of Statistics (DIE) disclosed that the country's consumer price index (CPI) rose 0.71% and producer price index (PPI) increased 1.21% in April compared to the previous month. Both figures were in line with market expectations. Accordingly, year-on-year CPI rose slightly to 8.18%, while year-on-year PPI regressed to 10.17% in April. On the PPI front, the 1.28% contraction in agricultural prices procures a controlled movement in producer price index's increase. However, excluding agricultural prices, the increase in prices of mineral (5.29%) and manufacturing sectors (1.95%) affected the PPI negatively. Especially, crude oil (18.25%) and refining output (10.7%) showed sharp increases. The increases in these sectors mainly emanate from the keen increases in oil and other mineral prices in global markets. In other words, the increase in PPI is largely attributed to the macro imbalances because of global economic situation. The 0.96% regression in food prices contributed to the overall consumer prices. Excluding food prices, CPI rose 1.2%, a relatively high figure. Prices of energy and public as well as tax increases play a significant role in the inflationary pressure. On the CPI front, global economy and basic financial structural problems impacted inflationist pressures. Under these circumstances, economists do not expect any change in the short-term interest rates due to the fluctuations in global markets and uncertainty in internal political developments.