Turkish inflation of nearly 33% could slow interest rate cuts

Turkish inflation came in higher than expected in August, at nearly 33 per cent annually and more than 2 per cent on a monthly basis, readings that are likely to slow the central bank's plans to cut interest rates as it also weighs stronger economic growth.

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Annual consumer price inflation stood at 32.958 last month, official data showed on Wednesday, above a Reuters poll estimate of 39.68. It was up 2.048 on a monthly basis.

In further evidence that consumer demand remains strong despite the effects of prolonged monetary tightening, separate data on Monday had shown that Turkey’s economy grew by 4.8 per cent in the second quarter, above expectations.

The data flurry comes at a jittery time for investors in Turkey.

A court on Tuesday ousted the Istanbul provincial head of the main opposition Republican People’s Party (CHP), dealing a fresh judicial blow to opponents of President Tayyip Erdogan and triggering sharp falls in Turkish share and bond markets.