By Joshua Kirby
Turkish consumer prices rose at a faster rate again in December, though a less rapid rise in core prices could take some pressure off the central bank as it looks to ease the country's sky-high inflation rates.
The consumer price index increased by 64.77% on year in the last month of 2023, figures from the country's statistics office Turkstat showed Wednesday. This was a little less than the 65.0% expected by economists, according to a FactSet poll, but marks another tick-up in the index from the 61.98% rise booked in November.
Turkey's central bank has been battling to rein in rampant price inflation that has hobbled the Turkish lira. The bank has lifted its key interest rate repeatedly this year in a new and tighter policy, raising it to 42.5% at its most recent meeting last month. The bank nevertheless signaled it may be drawing close to ending its cycle of rate hikes if price pressures ease in the months ahead.
Services continued to lead Turkish inflation in December, Turkstat's figures showed. The hospitality sector booked the highest rate at more than 93% on year, followed by health, education and transportation. Housing saw the lowest rate, at a little over 40%, while goods such as clothing and furniture were similarly at the lower end.
Core inflation, which strips out more volatile price moves in energy, food, tobacco and gold, booked a smaller increase than the headline rate, edging up to 70.64% from 69.89% in November. This suggests that price rises are easing at an underlying level, and that the Turkish central bank may indeed be able to pause its tightening cycle this month, said Liam Peach, senior emerging markets economists at consultants Capital Economics. Inflation could ease considerably over the course of the year, he said.
"The inflation figures will generally comfort the central bank," Peach said.
Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby
(END) Dow Jones Newswires
01-03-24 0401ET
