Turkish inflation accelerates, reaches 19.58%

Turkey’s consumer price inflation rose to 19.58% in September, according to data shared by the Turkish Statistical Institute (TÜİK), which also said that month-on-month prices surged 1.25%.

Monday October 04 2021 11:15 am

Duvar English

Turkey’s consumer inflation accelerated in September, driven by a surge in the cost of energy, Bloomberg reported on Oct. 4. A core gauge closely watched by the central bank also edged higher.

Prices rose an annual 19.58% through last month, up from 19.25% in August, while the median estimate in a Bloomberg survey of 22 analysts predicted an acceleration to 19.65%. Prices rose 1.25% from August, compared with the median estimate of 1.27% in a separate survey.

Annual price gains in food, which makes up roughly a quarter of the consumer basket, was little changed at 28.79% amid weak lira, arid weather affecting harvests and supply bottlenecks.

The rate of inflation in energy quickened to 22.77% from 20.72% in August. A tax mechanism intended to stabilize gasoline prices cushioned the spike in global energy prices in September.

Retail price inflation in Istanbul, Turkey’s business capital, climbed to 19.77% from 18.89% in August.

The lira weakened after the report and was trading 0.1% lower at 8.8644 per dollar at 10:07 a.m. Oct. 4 in Istanbul.

The main core index monitored by the central bank rose 22 basis points to 16.98%. Governor Şahap Kavcıoğlu delivered a surprise cut to interest rates last month, shortly after he highlighted the role of core prices in his forward guidance, citing transitory factors affecting headline inflation.

The central bank will hold its next rate-setting meeting on Oct. 21.