Turkey: Pace of disinflation is becoming more visible - TDS

Analysts at TD Securities point out that Turkey’s January inflation is due for release on Monday and the consensus anticipates no change with headline CPI expected at 20.3% Y/Y, same as in December.

Key Quotes

“The slowdown in the pace of disinflation is becoming more visible, with base effects working in the other direction now, and temporary government measures starting to show signs of wearing off.”

“TRY stability, soft crude oil prices and weak economic activity will continue to cap any possible inflation re-acceleration for now, if not support further disinflation. This dynamic is likely to be more visible in core figures than in the headline.”

“Core inflation is expected to fall further to 19% Y/Y in January from 19.5% a month earlier, while PPI may also continue to normalize although it won't likely fall below a still elevated 30% Y/Y.”