Turkey | November CPI realized as 21.3%

Summary

Consumer prices increased by 3.51% in in November, resulting in an annual inflation of 21.31% up from 19.89% the month before. We expect consumer inflation to surprise on the upside in the coming months with levels likely getting close to 30% towards the end of 1Q22.

Key points

• Key points:
• Food inflation remained elevated on the back of other unprocessed food (5.5% mom) and processed food (4.8% mom) price increases, where the annual figure recorded a decline with the positive base effects.
• Energy prices continued to accelerate on the back of currency depreciation and price hikes( 6%mom and 32.1% yoy). Outlook likely to deteriorate further.
• Core prices accelerated driven by the currency depreciation as well (2.8%mom 17.6%yoy).
• Domestic producer prices rose by 10% mom (54.6% yoy) and likely to remain elevated, given the recent natural gas price, further deterioration in energy prices and currency depreciation.
• High currency depreciation, strengthening cost push factors accompanied with high demand and worsening expectations (also supported by the recent acceleration in credit growth and brought-forward demand), and continuing supply side problems risks remain clearly on the upside for inflation outlook.

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