Annual CPI starts to decline in April

Dünya Executive - - COMMENTARY -

The annual CPI increased much more than the previous years’ averages in the April-September period of the previous year. The CPI increased by only 2.72 percent in the 2003-2017 period, in the fifteen-year average. The increase recorded in the April-September period of last year was 16.16 percent.

April-December rates are closer to each other. In the previous fifteen-year average, the April-December increase was 6 percent, and

last year’s increase was 17 percent. This year we will neither have the increase of 2003-2017 average nor the last year’s record rate. We need to expect a more reasonable rate. There are also a number of factors that will determine how inflation will develop but we do not know what developmen­ts will be seen on these factors.

We don’t know yet what kind of economic policy the government will adopt after the elections. It is hard to predict the effects of these policies and the factors that will emerge that are out of our control on the exchange rate.

Sharp declines will occur

There have been months with a higher increase in the CPI than the general trend last year. But the most significan­t difference­s were observed in June, August and September. Especially when we come to September, we see a very significan­t decrease in the annual rate. The CPI increase in the remaining nine months of this year can come in at 10-11 percent, unless there are any developmen­ts that would lead to extraordin­ary deviations. In this case, the increase in CPI of 2019 will be around 13-14 percent.

However, we have to underline once again: This prediction is based on the assumption that the dollar will not go through the roof and that we will not politicall­y find ourselves in new turbulence­s and uncertaint­ies and will not drown in the problems in the internatio­nal arena.

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