Data released this week in Turkey showed consumer prices increased by 3.51% in November, resulting in annual inflation of 21.31% up from 19.89%. Analysts at BBVE, expect consumer inflation to surprise on the upside in the coming months with levels likely getting close to 30% towards the end of the first quarter of 2022.
“Consumer prices increased by 3.51% in November, being realized above expectations (BBVA Research 3.25%, Consensus 3.0%) and resulting in an annual inflation of 21.31% up from 19.89% the month before. Our main deviation was this time due to core prices inflation, which reflected faster than expected pass-thru from cost factors.”
“Looking ahead, accelerating exchange rate pass-thru, continuing very high volatility in the currency, strengthening cost-push factors, high food inflation and growing pressures from imported inflation reinforce upside risks and uncertainty for the inflation outlook. Besides, domestic demand is accelerating on mainly consumption and inflation expectations keep significantly deteriorating. We expect consumer inflation to surprise on the upside in the coming months with levels likely getting close to 30% towards the end of 1Q22, which will be very challenging to keep the current loose stance.”
“Given the increased volatility, inflation will likely experience levels close to 30% in next months, becoming challenging to keep loose policies when the global yields are rising. The CBRT still signals to deliver a rate cut in December but then to wait in order to see the cumulative effects of the current rate cuts in the first half of 2022.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.