Turkey: Inflation cools more than expected in February
Latest reading: Inflation eased to 39.1% in February from January’s 42.1%. February’s figure came in below market expectations and represented the lowest inflation rate since June 2023. The moderation was primarily driven by a softer increase in prices for food and non-alcoholic beverages. Moreover, prices for restaurants and hotels grew at a more subdued pace.
Annual average inflation fell to 53.8% in February (January: 56.4%). Meanwhile, core inflation fell to 40.2% in February from January’s 42.6%.
Lastly, consumer prices increased 2.27% in February over the previous month, which was below January’s 5.03% increase.
Outlook: Our Consensus is for inflation to moderate further in the coming quarters on the heels of prior interest rate cuts and a high base effect.
Panelist insight: ING’s Muhammet Mercan commented:
“While there are pricing pressures due to the recovery in domestic demand, leading producers to pass cost increases to consumers, disinflation is expected to continue as the CBT has signalled it will maintain its tight stance despite the start of interest rate cuts, ongoing real TRY appreciation, and improvement in services inflation.”