While the course of the base effect in inflation in Turkey was carefully monitored, market participants predicted that there was an increase in prices in the first month of the new year compared to the previous month.
The median expectation of 14 institutions participating in the inflation survey of Bloomberg HT Research Unit was that the inflation would be 3.8 percent monthly and 53.7 percent annually in January.
In monthly inflation, the lowest expectation was 1.9 percent and the highest expectation was 5.9 percent. In annual inflation, the lowest expectation was 50.7 percent, and the highest expectation was 66 percent.
Inflation expectations for the end of the year were also asked in the survey. Accordingly, the median expectation was that inflation would reach 42 percent at the end of 2023.
In the December survey, market participants expected inflation to be 44.5 percent at the end of the year.
Annual inflation declined due to the base effect, and the monthly increase series continued.
In 2022, annual inflation in Turkey peaked at 85.51 percent in October, and was recorded as 64.3 percent in December due to the base effect.
In December, annual inflation receded due to the base effect, while price increases continued on a monthly basis. In December, monthly inflation was 1.18 percent, and the monthly inflation series had increased to the 48th month with December.
Leading indicators also pointed out that the monthly increase series would continue in January. According to the ‘Linear of Hunger and Poverty’ research prepared by Türk-İş, the increase in the base expenditure price that a family of four living in Ankara should make for “food” was 9.02 percent compared to the previous month. As of the last twelve months, the rate of change was 108.57 percent.
The Central Bank of the Republic of Turkey (CBRT) announced in its latest inflation report that it kept the inflation assumptions at 22.3 percent for the end of 2023 and 8.8 percent for the end of 2024.