Turkey’s inflation jumped to 12.62 percent in June: report

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Photo by Roxanne Desgagnés on Unsplash

Turkish inflation climbed more than expected to 12.62 percent year-on-year in June, official data showed on Friday, drifting further away from the central bank’s target after it abruptly halted a policy easing cycle last week, Reuters reported.

The month-on-month consumer prices rise was also stronger than expected at 1.13 percent, the Turkish Statistical Institute (TurkStat) said, compared to a Reuters poll forecast for 0.65 percent. The poll saw annual inflation at 12.09 percent in June, after it edged up to 11.39 percent in May.

The central bank — which forecasts 7.4 percent inflation by year end — cited upward price pressures when it unexpectedly held rates steady last week. Nearly a year of aggressive cuts have left Turkey’s real inflation rate well into negative territory.

Jumps in food, alcohol, housing and health prices drove up the annual figure last month as the Turkish economy began emerging from the near standstill of a coronavirus lockdown.

The producer price index rose 0.69 percent month-on-month in June for an annual rise of 6.17 percent, the data showed.

Inflation has remained well above the bank’s target range of around 5 percent since a currency crisis in 2018. It briefly touched single digits last year but has drifted higher in recent months.

The lira hit an all-time low against the dollar in May and is down around 13 percent this year. A further depreciation would risk higher inflation via imports.

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