Turkey's inflation is easing, payment-card data shows

Thanks to a history of unorthodox policy, Turkey has long had one of the world's worst inflation problems. As a result, its central bank has yet to join the global rate-cutting cycle. This week, policy makers held the key rate at 50%, but were cautiously optimistic that price increases would slow.

CEIC offers a high-frequency source that might explain this outlook: payment-card data from the central bank. (This also gives our users a timely edge on official data; Turkey's statistics office will release October CPI in the first week of November.)

We've charted the consumer price index against a measure of inflation derived from payments made with Turkish credit and debit cards. The CEIC-derived weighted average transaction size index started October by declining for a fifth consecutive week -- sliding to 43.8%, its lowest value since July 2023.

As our first chart shows, this roughly matches the 49.4% inflation rate (year-on-year) recorded for September; it's also notable that CPI growth slowed from August's reading of 52.

We calculate our index by using weekly payment value and volume figures, deriving the payment card unit value index (PUVI). As the data can be disaggregated by different transaction types (e.g.: food, fuel, clothing, etc.), CEIC generates a weighted average that mimics the composition of the official CPI.

Our second chart paints a picture of stickier inflation when some of the more volatile components are removed. Average PUVI for non-food and non-fuel transactions remained elevated at 55.7% for the first week of October; weekly data in our final charts (compared to transport and food CPI) further confirms that the current moderation is quite linked to disinflation at the gasoline pump and the grocery store.                                                                                                   

If you are a CEIC user, access the story here.