November CPI :"The wait is over"

Turkish Economy: November CPI

The wait is over

CPI increased by 1,49% MoM above market expectation of a 1,10% increase. Annual CPI inflation accelerated to 12,98% – highest since November 2003. PPI inflation surprised to the upside by rising 2,02% MoM – again significantly above its historic average of 0,78%. Annual PPI inflation stood stable at 17,3%. In tandem with general inflationary trends, core inflation reached 12,08% YoY – slightly better than market expectation of 12,3% (Figure).

Key Take-aways:

  • Both CPI and PPI have peaked.
  • Expect tighter monetary policy from central bank.
  • The peak has been reached at a higher level compared to previous expectations due to recent currency and supply related shocks.
  • Inflation to remain at about 8 – 9% range next year finishing the year in the vicinity of 8,5%.
  • Going forward real rates will become more visible with inflation reverting to its mean.