Turkish inflation seen rising again to 17% in June
- The bank has kept its policy rate at 19% since March
ISTANBUL: Turkey's consumer inflation is expected rise to 17% again in June, a Reuters poll showed on Wednesday, after an unexpected dip a month earlier when price hikes were delayed due to a COVID-19 lockdown.
Inflation, which has remained in double digits for most of the last four years, has risen this year partly due to the lira's depreciation, sparked by President Tayyip Erdogan's sacking of a hawkish central bank governor.
Despite expectations that inflation would rise again after topping 17% in April, the consumer price index unexpectedly dipped to 16.59% after a three-week lockdown in May led businesses to forego price hikes. Economists had said those hikes would be implemented in June.
The median estimate of 13 respondents in a Reuters poll for annual inflation in June stood at 17%, with forecasts ranging between 15.90% and 17.54%.
The median estimate of 14 economists for the monthly rate was 1.50%, with forecasts ranging between 0.5% and 2%.
The currency's decline in value of about 17% since mid-March has raised overall prices for import-dependent Turkey. It also pushed producer price inflation above 38% in May, which is expected to be reflected on consumer prices.
Annual inflation is now seen falling to 15.00% by the end of the year, according to the median estimate of 12 economists. Their forecasts ranged between 12.7% and 15.50%.
The median number compares to 14% in the April poll and 10.8% in the January poll - conducted before the former governor was sacked causing the lira to plunge.
The central bank also revised its year-end forecast higher in April to 12.2%, still well below market expectations.
The bank has kept its policy rate at 19% since March.
The bank's adjustments to policy statements in recent months were read by some analysts as preparation to cut rates in coming months. Others believe the high inflation and lira weakness will delay policy easing.
The Turkish Statistical Institute is scheduled to release June inflation data at 0700 GMT on July 5.
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