Turkish inflation hits near 3-year low in October

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Turkey’s consumer price index fell to 8.55 percent year-on-year in October, official data showed on Monday, dragged down to its lowest level in nearly three years due to temporary measurement “base effects” from last year.

Last year, inflation surged in September and hit a 15-year high above 25 percent in October as Turkey’s currency crisis sent the cost of imports soaring. It has since dropped, and last year’s sharp jump pushed down the annual reading on Monday.

A Reuters poll forecast annual inflation of 8.6 percent in October. It was the second consecutive month of single-digit inflation, having fallen to an annual 9.26 percent in September from 15.01 percent the previous month.

Month-on-month, consumer inflation stood at 2.00 percent in October, data from the Turkish Statistical Institute showed, compared with a poll forecast of 2.02 percent.

October inflation was driven by an 11.7 percent month-on-month rise in clothing and shoes prices, while food prices were up 1.65 percent.

The Turkish lira weakened to 5.7025 against the dollar after the data from around 5.69 beforehand.

Last week’s inflation poll showed that end-year annual inflation was seen at 12.3 percent, down from a forecast of 13.3 percent a month earlier. Inflation is expected to return to double-digits in the last two months of the year as base effects wear off.

In its quarterly inflation report last Thursday, the Turkish Central Bank reduced its year-end inflation estimate to 12 percent from 13.9 percent in its previous report.

The producer price index was up 0.17 percent month-on-month in October for an annual rise of 1.70 percent, data from the Turkish Statistical Institute also showed.

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