After the Turkish Statistical Institute (TÜİK) announced that the Consumer Price Index (CPI) for August increased by 9.09 percent on a monthly basis and by 58.94 percent annually, the CBRT’s Price Developments Report was also published.
According to the report, annual inflation increased in all main groups as a result of the lingering effects of tax and administered price adjustments from July, as well as the depreciation of the Turkish lira and the lagged effects of wage increases and the rise in global energy prices.
While the highest monthly increase was recorded in the energy group with 14.23 percent, foreign price pressures as well as the tax effect from the previous month were the determining factors in this development.
While fuel price increases were rapidly reflected in transportation services prices, the group’s monthly inflation recorded the highest increase calculated within the scope of 2003-based CPI, with 27.62 percent.
In addition to food, minimum wage and service items with high sensitivity to exchange rate developments, high increases were observed in rents.
Prices of core goods continued to rise, especially with the lagged effects of the depreciation in the Turkish lira.
While the unfavorable outlook in fresh fruit and vegetable prices continued in August, price increases in the processed food sub-group spread across the globe and strengthened. While the upward trend in producer prices continued, being more evident in the energy group, producer-driven upward pressures on consumer prices became evident in the last three months.
Under this outlook, monthly inflation rates in indicators B and C remained strong in seasonally adjusted terms, while annual inflation in indicators continued to rise.
“There was an increase in all subgroups”
In this period, the annual rate of change in B and C indices increased by 9.20 and 8.76 points, respectively, to 63.52 and 64.85 percent. When the contributions to annual consumer inflation are analyzed, there was an increase in all sub-groups in this period. Compared to the previous month, the contributions of services, food, basic goods, energy and alcohol-tobacco-gold groups increased by 3.00, 2.86, 2.60, 2.51 and 0.14 points, respectively.
When analyzed with seasonally adjusted data, monthly increases in B and C indices maintained their high levels reached in the previous month. While price increases strengthened in processed food, one of the B index groups, compared to the previous month, it continued to be high in services and basic goods.
Prices of services rose by 9.19 percent in August, while the group’s annual inflation reached 79.57 percent with an increase of 9.92 points. In this period, price increases spread across sub-groups, more prominently in transportation services.
Due to the sharp increase in fuel prices in transportation services prices, the highest increase in the 2003-based index was recorded with a rate of 27.62 percent on a monthly basis.
In this development, in addition to managed-directed items (city passenger transportation by bus and taxi and passenger transportation by air), intercity passenger transportation prices by land were decisive.
While the ongoing strong price increases in the restaurant-hotel subgroup continued in August, annual inflation in the subgroup reached 89.31 percent as prices rose by 7.09 percent.
“Monthly increase in the rent subgroup was a little stronger and became 7.90 percent”
While the monthly increase in the rent sub-group strengthened slightly to 7.90 percent, annual inflation rose to 87.78 percent. In the other services subgroup, prices increased by 7.19 percent, with the maintenance and repair of personal transportation vehicles, health services and entertainment-culture services being the prominent items in this development.
Annual core goods inflation increased by 7.72 points to 51.97 percent. High price increases were recorded in all sub-groups of core goods with high exchange rate pass-through.
While prices in the durable goods sub-group rose by 7.82 percent, significant increases were observed in automobile, white goods and furniture prices in this period. While the pending effects of the update in the pharmaceutical reference euro rate and the tax adjustment were felt in the other core goods subgroup, a general increase in prices was recorded by 9.92 percent.
In the clothing and footwear group, annual inflation rose to 29.96 percent as prices increased by 8.25 percent, contrary to the seasonal trend. While energy prices increased by 14.23 percent in August, the group’s annual inflation increased by 16.89 points to 14.03 percent. The rise in international energy prices, as well as the lingering effect of the tax increase that took place in the middle of the previous month, was the determining factor in the group’s monthly price increase.
Under this outlook, fuel and bottled gas items increased by 26.11 percent and 23.93 percent on a monthly basis, respectively. In addition, mains water prices increased at a high rate (7.43 percent) in August. Prices of food and non-alcoholic beverages increased by 8.48 percent in August, while annual inflation increased by 12.14 points to 72.86 percent.
“Fresh fruit and vegetable prices increased markedly, led by fruit prices”
Annual inflation increased by 13.93 points to 93.64 percent in unprocessed food, and to 57.80 percent in processed food with an increase of 11.02 points. Seasonally adjusted data indicated that fresh fruit and vegetable prices showed a marked increase in this period, led by fruit prices.
In the course of the unprocessed food group, the rise in the prices of eggs and nuts, excluding fruits and vegetables, came to the fore in this period. While the monthly increase in the processed food group strengthened compared to the previous month (11.17 percent), bread-cereals, milk and dairy products, solid-liquid oils and non-alcoholic beverage items drew attention with price increases.
Prices in the group of alcoholic beverages and tobacco products rose by 3.77 percent, while annual inflation increased by 5.40 points to 51.98 percent. In this development, the effects that hung over the month of August were decisive, as the price increases due to the tax regulation made last month were reflected to the index as day-weighted.
While domestic producer prices increased by 5.89 percent in August, annual inflation increased by 4.91 points to 49.41 percent. Analyzing by main industry groups, annual inflation increased in all sub-groups, while the increase in energy producer prices on a monthly basis, based on international energy commodity and exchange rate developments, was evident with 14.27 percent. When monthly price developments are analyzed by sectors, it is observed that the increases are widespread, while crude oil and natural gas, refined petroleum products, basic pharmacy, coal and lignite, furniture, other mining-quarrying and electricity-gas manufacturing sectors came to the fore with price increases.