Weekly Turkey Data Wrap-up and Preview
Here’s my take on recent and upcoming data:
First, a lower-than-expected June inflation (6.2 versus 7 percent, read the full details in the Citi report), but I would argue this is a mixed reading, because:
- As expected, food inflation registered a sharp fall (6.4 percent), adjusting after May’s surprise hike, but some demand-sensitive categories, such as housewares, communication, entertainment & culture and education, are edging up.
- Core inflation is continuing to creep up, as the CBT has warned about recently. But the rises may be more pronounced in the next couple of months because of the lira weakness in June (exchange rate pass-through is not immediate)
- PPI is a mixed reading as well, balanced by the fall in agricultural prices and the rise in metal inflation.
- I would tie the fall in some items in the CPI, such as transportation, to the fall in oil/gas prices, so oil’s path during the rest of the year will be crucial for Turkish inflation (and current account) prospects.
Second, TEPAV released the June results of its retail confidence index, and the disparity with the official TurkStat index is growing. In fact, the two indices are now clearly moving in opposite directions:
Houston, we have a problem! I haven’t had the chance to delve deep into the indices yet, other than my brief foray last week, so this is a topic for a future post, or even a Daily News column.
Finally, the key data releases of the week are on Friday, when June cash budget, CBT expectations survey, May trade indices (volume and price) and May Industrial Production will be gracing my Turkey Data Monitor screen. I have a very interesting piece on expectations, to follow up from my point from a couple of weeks ago that these expectations are meaningless.
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