Agencies
Turkish annual inflation slowed less than expected in September to 49.4 percent, official data showed Thursday, a figure which analysts said could disappoint central bank officials after a series of interest rate hikes. Turkey’s central bank began to raise rates last year in efforts to battle soaring prices, after President Recep Tayyip Erdogan dropped his opposition to orthodox monetary policy.
The September inflation figure was higher than the 48.1 percent consumer price increase forecast by Turkish economists cited by local media. Inflation had reached 52 percent in August.
“The smaller-than-expected decline in Turkey’s headline rate to 49.4 percent y/y (year-on-year) in September will be a disappointment to policymakers at the central bank,” Nicholas Farr, emerging Europe economist at the London-based Capital Economics, said in a note to clients.He said the figure showed that a monetary easing cycle was unlikely to start until 2025 - later than most other analysts have been forecasting. Last month, the central bank kept its main interest rate stable at 50 percent for a sixth consecutive month and said it remained highly attentive to inflation risks.
According to the central bank’s forecast, inflation will ease to 38 percent at the end of this year, 14 percent next year and nine percent in 2026.
While inflation will fall further over the coming months, the central bank’s end-year forecast of 38 percent “looks way out of reach”, Farr said.
He said a particular concern for the central bank would be that, in month-on-month terms, core inflation continued to accelerate.
Inflation increased 2.97 percent on a monthly basis in September, the TUIK statistics agency said.
