Turkey’s annual consumer price inflation is expected to climb toward 12 percent in August, a Reuters poll showed on Monday, pushed up by higher energy prices and the weak lira.
The median estimate in a Reuters poll of 14 economists for annual inflation in August stood at 11.91 percent, with forecasts ranging between 11.40 percent and 12.37 percent. Inflation was 11.76 percent in July.
Monthly inflation was expected to be 1 percent, with estimates between 0.56 percent and 1.41 percent.
“Despite the favorable base year impact, higher energy prices as well as the FX pass-through impact, especially on core good prices, will carry the annual inflation close to 12 percent,” said Ozlem Bayraktar Goksen, chief economist at Tacirler Yatirim.
“VAT cuts on some services (especially on hotels and restaurants prices) are considered to have a downward effect... However, the prevailing depreciation in the lira would increase the pressure on the core goods prices in August.”
The Turkish currency, which hit a series of record lows against US dollar in August, has shed 19 percent of its value so far this year.
The Turkish central bank ended a run of rate cuts in June and has held its policy rate at 8.25 percent since then, citing some uptick in prices. It raised its year-end inflation forecast to 8.9 percent a month ago, but said inflation will enter a falling trend beginning in July.
For year end, the poll’s median inflation estimate of 10 economists was 11 percent, compared to 10 percent in the July poll.
Annual inflation fell to 11.76 percent in July, reversing two months of rising inflation as the economy continued to emerge from lockdown.
On Sunday, Turkey increased its special consumption tax on mid-range and expensive cars, a move which economists said could lift year-end inflation by up to 1 percent.
The Turkish Statistical Institute is expected to announce August inflation data on Thursday, September 3.