Page 14 - bne IntelliNews Turkey Outlook 2024

4.0 Inflation & Monetary Policy
Turkey’s consumer price index (CPI) inflation officially stood at 65% y/y in December versus 62% y/y in November and 38% y/y in June, the Turkish Statistical Institute (TUIK, or TurkStat) said on January 3.
At 65% per year, Turkey moved up to fifth place in the world inflation league.
The Istanbul-based ENAG inflation research group of economists, meanwhile, calculated a Turkish inflation figure of 127% y/y for December. The ENAG figure calculated for November was 129% y/y, while for June it was 109% y/y.
TUIK also gave an official figure of 44% y/y for producer price index (PPI) inflation in December.
Following the national elections held in May, another wave of currency depreciation coupled with widespread tax hikes dynamited pricing behaviour in the country once again.
Following the appointment of Turkey’s post-election new economic team, the Erdogan regime launched a tightening process that is still ongoing. It gradually raised the policy rate to 42.50% by December from 8.5% in June.
On December 21, the latest policy rate hike, amounting to 250bp, was delivered. The monetary policy committee (MPC) said that it would end the tightening cycle as soon as possible.
The next MPC meeting is scheduled for January 25. As things stand, it appears that the rate-setters will conclude the cycle at 45% by bringing in another 250bp hike.
14 Turkey Outlook 2024 www.intellinews.com