Turkish inflation seen in single digits in October, around 12% by year end

Turkish inflation seen in single digits in October, around 12% by year end

Turkey’s annual inflation is expected to have remained in single digits for a second consecutive month in October to stand at 8.6%, partly reflecting so-called base effects given high price increases a year ago, a Reuters poll showed on Friday.

Inflation surged to more than 25% in October 2018 in the wake of a currency crisis in which the lira plummeted against the dollar, but it has since declined due to higher interest rates and lagging economic activity.

In September the consumer price index (CPI) fell to single digits for the fist time in more than two years. For October the median estimate in a Reuters poll of 20 economists was 8.6%, with forecasts ranging between 9.5% and 7.7%.

Finance Minister Berat Albayrak said on Thursday inflation may fall to around 8% in October.

For the monthly rate, estimates of 19 economists ranged between 2.9% and 1.2%, with a median of 2.02%.

For the year as a whole – in this case based on responses from 16 economists – the average estimate has fallen to 12.3% from 13.3% last month. That’s after inflation is expected to return to double-digits in the last two months of the year as base effects wear off.

The Turkish Statistical Institute is due to announce October inflation data on Nov. 4 at 0700 GMT.

Albaraka Turk economist Lutfullah Bingol said the downward trend in the annual CPI is expected to continue in October, partly due to food prices rising less quickly, though other factors meant prices rose more sharply month-on-month than in September.