ANKARA: Turkish headline inflation fell as expected in August but core indicators rose and could trend higher in the coming months as a weakening lira puts upward pressure on prices.
The consumer price index (CPI) fell 0.10 percent month-on-month in August for a year-on-year increase of 8.17 percent, the Turkish Statistics Institute said yesterday.
The producer price index rose 0.04 percent on the month, for an annual rise of 6.38 percent. But annual core inflation rose and is likely to keep doing so as the pass-through effect of a depreciating lira becomes more evident, economists said.
Among core consumer price indicators watched by the central bank, a measure that excludes unprocessed food products, energy, alcoholic beverages, tobacco products and gold rose to 6.79 percent from 6.49 percent the previous month. Another measure excluding all these items plus other forms of food accelerated to 6.37 percent from 6.09 percent.
“The CPI came in line with expectations but the breakdown of it shows risks regarding inflation are still upwards,” said Ali Cakiroglu, strategist at HSBC. “The depreciation in the lira and rising oil prices will pressure inflation in the coming period. We think annual CPI could exceed 7 percent at year-end.” Reuters