The Consumer Price Index (CPI) rose by 2.37% in July, according to the Turkish Statistical Institute (TurkStat). Although the annual inflation, which hit 79.60%, remained slightly below market expectations, it has reached its highest level since September 1998. TurkStat also said the domestic producer price index (D-PPI) soared 144.61% in July, year-over-year.
The Istanbul Wage Earners Cost of Living Index (WECLI) prepared by the Istanbul Chamber of Commerce (ITO) jumped 99.1%, and the Inflation Research Group’s (ENAG) consumer inflation hit 176.04% in July. The WECLI has significantly differentiated from TurkStat figures due to higher prices in big cities and the difference between the inflation calculation of ENAG and TurkStat has more than doubled.
The ITO and ENAG’s data are more coherent than the analyses and forecasts of TurkStat, according to analysts. Their year-end inflation estimation, meanwhile, moves towards 80% for 2022.
Treasury and Finance Minister Nureddin Nebati, evaluating recent economic developments, stated that inflation will enter the downward circle with the base effect at the end of 2022 and the decline in inflation will be more clearly felt in February-March 2023. Stressing that 132 countries are implementing negative interest rates, Nebati said the economy will start to contract at the end of 2022 if Turkey starts to increase the policy rate.
Turkey’s benchmark stock index ended with gains yesterday to finish at an all-time high closing of 2,684.46 points. After starting the day at 2,664.83 points, Borsa Istanbul’s BIST 100 Index earned 36.84 points, or 1.39% from Tuesday’s close of 6,47.59 points, with a daily trading volume of TRY 37.5bn. Although U.S. House Speaker Nancy Pelosi’s visit to Taiwan has raised geopolitical risks, equity markets have protected their positive outlook, according to analysts. They said 2,540 points will be the support level and 2,700 points will be the resistance level for the BIST 100 index, in technical terms.
USD/TRY broke another record of the year at 18.09 yesterday before it fell to 17.98. It is traded at 17.96 this morning. EUR/TRY, which rose to 18.33 yesterday, hovers around 18.26 this morning.
The Central Bank will release the Real Effective Exchange Rate for July (2.30 p.m.).
The Central Bank will release weekly monetary and banking statistics (2.30 p.m.).
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The agreement on the delivery of Ukrainian and Russian grain to the world, signed under the leadership of Turkey, under the auspices of the UN, give the impression of a compromise where everyone wins. However, the devil is in the details. Looking closely at the deal, this is hardly a situation where “everybody is a winner.” On the contrary, small concessions that can have big consequences in the future are contained in the agreement texts.