Turkey inflation dips below 72%, begins expected slide
Disinflation has begun, says finance minister
Annual inflation seen falling to some 42% by year-end
Interest rates hiked by 4,150 pts in policy U-turn
Single-digit inflation unlikely before 2027, analyst says
Adds Simsek, analyst comments, market reaction
By Daren Butler
ISTANBUL, July 3 (Reuters) -Turkey's annual inflation rate began whatis expected to be a sustained fall in June, dipping more than expected to 71.60%, according toofficial data on Wednesday, while monthly inflation cooled markedly.
Officials and analysts predict a gradual slide in consumer price inflation in the remainder of 2024 after a year-long monetary policy tightening campaign, with economists forecasting it will reach 42.2% by year-end.
Monthly consumer price inflation was also below expectations at 1.64%, according to the Turkish Statistical Institute, compared with 3.37% in May. The annual measure is down from 75.45% in May, the highest since November 2022.
"The disinflation process has begun," Finance Minister Mehmet Simsek said on X afterward, adding that the implied trend was consistent with the government's year-end target.
He said disinflation would reflect successes achieved in financial stability, a sustainable current account deficit, foreign reserve accumulation and Turkey's exit from the FATF crime watchdog's "grey list" .
In a Reuters poll, economists had forecastthat annual inflation would fall to 72.6% in June.
Education, housing and restaurant prices sustained the inflationary pressure last month, the data showed, underscoring the lingering cost-of-living crisis that has gripped Turkey in recent years.
After the data, the lira TRYTOM=D3 was 0.1% weaker at 32.5680 against the dollar while the main Istanbul share index .XU100 was 1.1% higher.
"TIME AND DISCIPLINE" NEEDED
The central bank has hiked rates by 4,150 basis points to 50% since June last year. It was a dramatic reversal of years of loose policy advocated by President Tayyip Erdogan, despite rising prices, in order to boost growth.
Bartosz Sawicki, a market analyst at Conotoxia Fintech, said the data reassured the central bank that "inflationary pressures are finally starting to ease as the U-turn in policy stance begins to bear fruit."
"Nonetheless, further progress in eradicating the long-standing inflation problem remains in doubt," he said, with a return to single-digit inflation before 2027 "highly unlikely".
"Solving the inflation problem requires time and discipline. Decades of ultra-loose monetary policy and overly expansive fiscal policy led to profound macroeconomic imbalances."
Monthly inflation was particularly high in the first two months of 2024, mainly due to a big minimum wage hike and other priceupdates, before it started to ease.
After the latest rate hike in March, due to a deterioration in the inflation outlook,the central bankhas held steady and vowed to tighten further in the case of a significant deterioration in inflation, seeing an end-year rate of 38%.
The domestic producer price index was up 1.38% month-on-month in May for an annual rise of 50.09%, the data showed.
Writing by Daren Butler; Editing by Jonathan Spicer and Anil D'Silva
Actifs liés
Dernières actualités
Avertissement : Les entités de XM Group proposent à notre plateforme de trading en ligne un service d'exécution uniquement, autorisant une personne à consulter et/ou à utiliser le contenu disponible sur ou via le site internet, qui n'a pas pour but de modifier ou d'élargir cette situation. De tels accès et utilisation sont toujours soumis aux : (i) Conditions générales ; (ii) Avertissements sur les risques et (iii) Avertissement complet. Un tel contenu n'est par conséquent fourni que pour information générale. En particulier, sachez que les contenus de notre plateforme de trading en ligne ne sont ni une sollicitation ni une offre de participation à toute transaction sur les marchés financiers. Le trading sur les marchés financiers implique un niveau significatif de risques pour votre capital.
Tout le matériel publié dans notre Centre de trading en ligne est destiné à des fins de formation / d'information uniquement et ne contient pas – et ne doit pas être considéré comme contenant – des conseils et recommandations en matière de finance, de fiscalité des investissements ou de trading, ou un enregistrement de nos prix de trading ou une offre, une sollicitation, une transaction à propos de tout instrument financier ou bien des promotions financières non sollicitées à votre égard.
Tout contenu tiers, de même que le contenu préparé par XM, tels que les opinions, actualités, études, analyses, prix, autres informations ou liens vers des sites tiers contenus sur ce site internet sont fournis "tels quels", comme commentaires généraux sur le marché et ne constituent pas des conseils en investissement. Dans la mesure où tout contenu est considéré comme de la recherche en investissement, vous devez noter et accepter que le contenu n'a pas été conçu ni préparé conformément aux exigences légales visant à promouvoir l'indépendance de la recherche en investissement et, en tant que tel, il serait considéré comme une communication marketing selon les lois et réglementations applicables. Veuillez vous assurer que vous avez lu et compris notre Avis sur la recherche en investissement non indépendante et notre avertissement sur les risques concernant les informations susdites, qui peuvent consultés ici.
