ISTANBUL (Reuters) -Turkey’s annual inflation is expected to rise to 17.25% in May, increasing for an eighth straight month contrary to central bank expectations, according to a Reuters poll on Monday that predicted it would drop to just below 15% by year-end.
A recent lira depreciation, sparked by President Tayyip Erdogan’s sacking of a hawkish central bank governor, has raised both inflation and expectations for more. The consumer price index (CPI) rose 17.14% in April.
The currency’s decline of about 15% since mid-March has raised overall prices for import-dependent Turkey and pushed producer price inflation above 35% in April.
The median estimate of 15 economists in the Reuters poll for annual inflation in May was 17.25%, with forecasts ranging between 16.94% and 17.58%.
Month-on-month, CPI was expected to stand at 1.46%, with forecasts ranging from 1.18% to 1.73%.
Central Bank Governor Sahap Kavcioglu said last month that inflation was expected to peak in April after topping 17%, even while most economists saw it rising a bit more.
The bank’s adjustments to policy statements in the last two months were read by some analysts as preparation to cut rates in coming months. Others believe the high inflation and lira weakness will delay policy easing.
The currency hit a record low of 8.6125 against the dollar on Friday.
Annual inflation is now seen falling to 14.90% by the end of the year, according to the median estimate of 11 economists. Their forecasts ranged between 11.7% and 15.50%.
The median number compares to 14% in the April poll and 10.8% in the January poll - conducted before the former governor was sacked causing the lira to plunge.
The central bank also revised its year-end forecast higher in April to 12.2%, still well below market expectations.
The Turkish Statistical Institute is scheduled to release May inflation data at 0700 GMT on June 3.
Reporting by Ali Kucukgocmen and Nevzat Devranoglu; Editing by Jonathan Spicer
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