I’m talking about the inflation, obviously. Expected to remain at single-digit due to the effects of negative inflation rates in last November and December, CPI is quite likely to hit double-digit over the upcoming months.
There is only one answer I can give to those who do not believe in CPI’s decline, type the numbers in an Excel sheet one after the other and calculate 12-month inflation rate. Please, don’t get upset with me over anything! According to TurkStat, the increase rate of consumer prices remains relatively on a year-over-year basis when compared to the last year. I know that the cost of production and the cost of living are drastically high right now, but there’s nothing we can do about it, because the government agency that releases official statistics declare that the price increased percentage has been slowing down!
As I have mentioned in my previous morning reports, disputes over whether the data released by TurkStat is actually accurate will not stop, since neither corporate income nor wages increase like CPI or PPI rates. However, people would have higher confidence in TurkStat, if it shared income analyses about persons and corporations and said, “You will realize that inflation is indeed falling when wages/income start increasing”.
TurkStat may be afraid of making the government upset by saying, “Wages aren’t going up”. This type of timidity, however, may be harmful to institutional prestige in the long-term.
In short, we expect today that CPI will remain in single-digit for one more month. After hitting double-digits for a couple of months, it would once again fall back to single-digit if everything goes exactly as predicted.
“What does Fitch’s decision mean?”
Fitch affirmed Friday Turkey’s credit rating as ‘BB’, changing the outlook to stable from negative.
If everything goes well, Fitch’s next step will be changing outlook on Turkey’s ratings to positive from stable. In the meantime, I really wonder what decision the Senate will make about the recently passed bill through U.S. House of Representatives. If things do not go as I predicted, I will have to revise my previous analyses.