Turkey’s June inflation below expectations
Turkey's State Institute of Statistics (DIE) disclosed that the country's consumer price index (CPI) rose 0.10% and producer price index (PPI) fell 0.48% in June compared to the previous month.
Accordingly, year-on-year CPI rose slightly to 8.95%, while year-on-year PPI regressed to 4.25% in June.
On the PPI front, the 3.37% contraction in agricultural prices and the 12.84% decline in natural gas prices contributed to the decline in PPI. However,
manufacturing sector showed a modest rise of 0.42%. A 9.27% increase in coke and refining output caused a rise in
manufacturing prices.
The 0.10% rise in oil prices was the main reason behind the CPI's rise. Excluding energy prices, CPI rose only 0.04% in June.
Food prices showed a 1.63% decline in June. Furthermore, a modest rise of 0.81% in clothing prices indicates that the price arrangements in this sector will appear over the next months. Consequently, the CPI may show a downward trend.
Under these circumstances,
Turkey's Central Bank may reduce interest rates gradually in the coming months.