Page 11 - TURKRptMar22

Turkey’s official producer price (PPI) inflation, meanwhile, entered three-digit territory for the first time since March 1995, when it posted 144% y/y.
The February figure for official PPI inflation was 105% y/y. January: 94% y/y. End-2021: 80% y/y.
The ENAG research group inflation figure came at 124% y/y for February.
January: 115% y/y. End-2021: 83% y/y.
On January 27, the central bank’s quarterly inflation report implied that official CPI inflation was seen as peaking at around 55% y/y in May.
The market expectation at that point was in line with that of the central bank.
However, following the latest shock in commodity prices, the market expectation for the May peak moved up to the 60%s.
Mainstream forecasts for the likely trajectory of Turkey’s official inflation reckon without the lira crashing again and commodity prices coming totally off the hinges.
Brent oil on March 6 saw $130. The FAO food price index broke record in February with 140.7. As of March 4, Bloomberg Commodity Index (BCOM) was up 48% y/y to 131.
● Jan 27: The central bank hiked its expectation for end-2022 official inflation to 23% from the previous figure of 12% given in the October inflation report.
The upper limit on the official inflation forecast was also moved up, taking the expectation to 28% from 14%.
Turkey’s central bank currently serves as a lira printing house and an accounting department of the palace administration. Turkey’s monetary policy is absolutely inefficient, it makes no sense at all. The central bank has no impact on monetary policy and policy rate has no impact on market rates.
● April 28: New quarterly inflation report and updated inflation forecasts will be released.
11 TURKEY Country Report March 2022 www.intellinews.com