Turkey’s inflation rate below expectations
Turkey's July inflation data materialized below the expectations. The State Institute of Statistics (DIE) said that inflation rate in wholesale prices (WPI) fell by 1.52% and increased by 0.22% in consumer prices (CPI) when compared with the figures of previous month. The core inflation rose by 0.3% in the mentioned period. Accordingly, year-on-year inflation rates increased to 9.44% in WPI, 9.57% in CPI and 10% in core inflation.
In July, the regression of 8.6% in agricultural prices took under control the increase in WPI while the regression of 0.5% in food prices slowed down the increase in CPI.
Despite the strong public sector increases, the increased rates of WPI, except in the agriculture sector, regressed significantly. This situation is attributed to the dwindling inflationary pressures because of depreciation of Turkish currency TL in April and May.
The flexibility of labour market, continuous productivity increases and strong finance and continuing money policies will keep on supporting the year-end targets. Oil prices and inflationary pressures could only create risk factors.