Turkey’s inflation accelerates to 10.6 percent in November
(Updates story with analyst comment in the fifth paragraph, lira in sixth.)
Consumer price inflation in Turkey accelerated to 10.6 percent in November, making a possible rate cut by the central bank more tricky to sell to investors.
The annual inflation rate rose from 8.6 percent in October, reversing three months of declines, the Turkish Statistical Institute said on its website on Tuesday. A Reuters poll of economists had predicted inflation of 11 percent for the month.
Turkey’s central bank has slashed interest rates by 1,000 basis points, or 10 percentage points, since July to 14 percent as inflation slowed sharply, helping government efforts to lift the economy out of a painful slump. The bank next meets on rates on Dec. 12.
Core inflation, which excludes food and energy, accelerated to 9.3 percent from 6.7 percent.
Faster price rises, spurred by unfavourable base effects from November last year, mean the central bank faces a difficult decision when it meets next week, said Tim Ash, senior emerging markets strategist at BlueBay Asset Management in London. Core inflation was higher than expected, he said.
The lira, battered by a currency crisis last year that pushed inflation to 25.2 percent, the highest level in a decade and a half, traded down 0.2 percent at 5.74 per dollar at 12:20 p.m. in Istanbul. It was little changed from earlier levels.
Food inflation climbed to 8.9 percent from 7.9 percent in October as the cost of items such as tomatoes surged. The central bank is forecasting food price inflation of 10 percent by the end of the year.
Annual producer price inflation gained to 4.3 percent in November from 1.7 percent the previous month.