Repeats without changes to text
reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/econ-polls?RIC=TRCPI%3DECI for monthly poll
reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/econ-polls?RIC=TRCPIY%3DECI for annual poll
ISTANBUL, Nov 29 (Reuters) – Turkey’s annual inflation is expected to rise to 63% in November due to the increase in food prices and natural gas usage and is seen to rise to 67% by the end of 2023, a Reuters poll showed on Wednesday.
The average estimate of 11 economists for annual inflation was 63%, with forecasts ranging from 61.6% to 64.1%. On a monthly basis, prices were expected to rise 3.9%, with forecasts ranging from 3% to 4.62%.
Annual inflation began to climb in July, breaking its eight-month falling streak after the taxes were introduced and it was also boosted by the lira’s sharp decline after the May elections, bringing its losses to more than 35% this year.
Since June, the central bank reversed a long-standing policy of low rates long favored by President Tayyip Erdogan and raised rates by 3,150 basis points to curb inflation and made changes to macroprudential measures to support the tightening.
The government announced, as part of President Tayyip Erdogan’s election promises earlier this year, that domestic consumption of natural gas up to 25 m3 will be compensated by the energy ministry’s budget until May next year.
Domestic natural gas consumption will exceed the levels covered by the government during winter months and it will make a strong contribution to inflation, said Daglar Ozkan, an economist at Is Yatirim.
“The general trend of inflation is beginning to normalize, but it will not decline to desired levels anytime soon with the technical increase in natural gas and a minimum wage increase in December. Annual inflation will not show a marked decline until May.”
Inflation touched a 24-year high of 85.5% last year after an interest rate cut triggered a currency crisis, sending the lira down 44% in 2021 and another 30% in 2022. Inflation fell to 38.2% earlier this year, partly due to. to base effects and a relatively stable lira.
The central bank decided to raise benchmark to 40% last week and said that the tightening cycle will end in a short time.
The central bank said that recent indicators suggest that domestic demand has started to moderate, however the existing level of domestic demand, the stickiness of services inflation and geopolitical risks are keeping inflationary pressures alive.
Annual inflation is seen at 67% by the end of 2023, according to the median estimate in the Reuters poll. Forecasts ranged between 65% and 68.9%.
Inflation is expected to continue to rise and peak in May 2024 at around 70-75%, according to the central bank before falling to 36 in late 2024.
The median of eight economists who responded to a question in the survey for inflation at the end of next year was 42.9%
The Turkish Statistical Institute will release November inflation data at 0700 GMT on December 4.
(Reporting by Ezgi Erkoyun; Editing by Ece Toksabay)
((ezgi.erkoyun@thomsonreuters.com))
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