Core CPI Jumps as Jan Inflation Outpaces Forecasts

TURKEY JAN CPI +6.65% M/M (FCST +4.0%); DEC +1.18% M/M

TURKEY JAN CPI +57.68% Y/Y (FCST +53.8%); DEC +64.27% Y/Y

TURKEY JAN CPI CORE +52.97% Y/Y (FCST 46.7%); DEC +51.93% Y/Y

• Turkish CPI jumped by +6.65% m/m in January, outpacing expectations with the largest month-on-month rate since April '22.
• Prices accelerated by 57.68% y/y, also hotter than anticipated, implying a 6.59pp deceleration from December, largely on the back of base effects.
• The +7.67% m/m and +52.97% y/y core uptick also surprised substantially to the upside.
• The health subcategory jumped +18.35% m/m in January, followed by hotels/restaurants at +12.73% y/y.
• The CBRT held the one-week repo rate steady at 9.0% for a second consecutive meeting in January, emphasizing that the level and underlying trend of inflation has been improving in recent months due to the policy approach, which has provided price and financial stability. This data alludes to the opposite.
• Turkish inflation outlooks are clouded by the upcoming May Presidential and Parliamentary elections, whereby public spending in order to boost votes will add to further inflationary pressures.

Source: Turkstat