Turkey's October inflation figures surprised

Turkey’s October inflation figures surprised

Based on the data released by the State Institute of Statistics (DIE), Turkey's October inflation figures turned out to be surprisingly high on both consumer prices (CPI) and wholesale prices (WPI). WPI registered an increase of 3.2% compared to market consensus of 1.7%. Main reasons behind the high level of WPI were the seasonal price increase in agriculture by 6.1% and serious price adjustments of the public sector. In addition, core inflation, which represents private manufacturing sector prices, rose by 1.4% against market consensus of 1%. Moreover, CPI soared by 2.2% compared to the market consensus of 1.4%. With the October figures, annual inflation figures reached 15.5% for WPI and 9.9% for CPI. As mentioned above, private sector manufacturing prices increased by 1.4% on a monthly basis in October mainly due to sharp price increases in clothing, petroleum and printing. The government announced 5% increase in petroleum prices and 6% increase in natural gas prices last month. The adverse impact of these prices will be experienced also in November. On the CPI side, core food prices rose by 3.6% on the back of Ramadan spending, whereas apparel prices recorded a 5.7% rise due to new season. After these figures, the economists revised upward their annual inflation forecasts.