Clothing, transportation drive inflation lower

TURKEY - Report 03 May 2019 by Murat Ucer

In April, consumer prices rose by 1.7%, m/m, notably lower than the market consensus of around 2.3% (and our forecast of just over 2%), taking the 12-month CPI inflation down to 19.5% from 19.7% in March. But domestic-PPI inflation showed a strong monthly increase of 3%, on the back of a weaker lira and higher energy costs, with the 12-month rate rising to 30.1% up from 29.6%, and the wedge between PPI- and CPI-inflation therefore widening again.

Looking at the contributions, clothing and transportation categories together seem to have shaved off some 0.8 pps from overall CPI inflation, both of which eased more than we had expected, while food and tobacco, the latter broadly in line with expectations (0.3 bps), appears to have jointly added some 0.6 ppts.

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