inflation, prices, shopping

Inflation in Turkey fell to 11.76% in July

The decrease in inflation last month in Turkey was favored by the fall in food prices, despite the crisis caused by coronavirus.

Inflation in Turkey experienced a greater than expected drop last July, with a Consumer Price Index (CPI) that grew only to 11.76% compared to the same month last year, according to the latest published data by the Turkish Statistical Institute (TÜİK), which reflect a change in trend after two consecutive months of rising prices due to the economic consequences of the coronavirus pandemic.

The biggest year-on-year increase in prices in July was registered in the transport sector, with an increase of 2.44%, while on the contrary in clothing and footwear costs fell by 3.48%. Price containment last month is largely explained by the key food and non-alcoholic beverages group, where prices fell 1.28%.

Compared to the previous month -June- the CPI increased in July by 0.58%, according to the latest TÜİK statistical report; several consulted economists had predicted an increase in July in relation to June of between 0.8 and 0.9%, while the predictions pointed out that inflation would increase above 12% in July compared to the data from 2019.

“We will continue with determination our fight against inflation,” Turkey’s Treasury and Finance Minister Berat Albayrak wrote in a message on Twitter, analysing the latest data released by the Turkish statistical agency. Economics experts nonetheless contend that the problems and disruptions in production caused by the coronavirus pandemic will have major consequences this year on inflation.

The Central Bank of the Turkish Republic (TCMB), which has kept its interest rate policy unchanged at 8.25% since June, last week raised its inflation forecast for the end of 2020 in Turkey from 7.4 to 8,9%, as long as there is no second wave of the COVID-19 pandemic, while for 2021 it places the forecast at 6.2%.