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TURKEY: Further Moderation in Headline Inflation Expected

TURKEY
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CPI data for September is on the docket later this morning (08:00BST/10:00 local time), with consensus looking for a decline in the headline rate from +51.97% y/y to +48.30%. The monthly figure is expected to moderate to +2.30% m/m from +2.47% in August.

  • Goldman Sachs forecast headline inflation to decline to +47.8% y/y and monthly inflation to fall slightly below +2.0% m/m. They expect momentum in energy inflation to decline close to +1.0% m/m given the absence of administered price changes, and for momentum in services inflation to decline as well but remain above +3.0% m/m.
  • Looking ahead, Goldman Sachs continue to expect services and headline inflation to start falling more notably from October onwards, allowing the CBRT to deliver the first rate cut (-100bps) in November (with risks skewed towards a later start of the cutting cycle).
  • UniCredit forecast that inflation eased to +48.3% y/y, likely driven by the disinflationary base effects in all major subcomponents. Meanwhile, monthly inflation will come in at 2.2%, in their view.
  • Going forward, UniCredit think further disinflation will be supported by the slowdown in domestic demand. Inflation could end this year at 44% and ease to 26% in 2025. This will pave the way for the CBRT to start reducing its policy rate in early 2025, they say.
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CPI data for September is on the docket later this morning (08:00BST/10:00 local time), with consensus looking for a decline in the headline rate from +51.97% y/y to +48.30%. The monthly figure is expected to moderate to +2.30% m/m from +2.47% in August.

  • Goldman Sachs forecast headline inflation to decline to +47.8% y/y and monthly inflation to fall slightly below +2.0% m/m. They expect momentum in energy inflation to decline close to +1.0% m/m given the absence of administered price changes, and for momentum in services inflation to decline as well but remain above +3.0% m/m.
  • Looking ahead, Goldman Sachs continue to expect services and headline inflation to start falling more notably from October onwards, allowing the CBRT to deliver the first rate cut (-100bps) in November (with risks skewed towards a later start of the cutting cycle).
  • UniCredit forecast that inflation eased to +48.3% y/y, likely driven by the disinflationary base effects in all major subcomponents. Meanwhile, monthly inflation will come in at 2.2%, in their view.
  • Going forward, UniCredit think further disinflation will be supported by the slowdown in domestic demand. Inflation could end this year at 44% and ease to 26% in 2025. This will pave the way for the CBRT to start reducing its policy rate in early 2025, they say.