Turkish Central bank expects increase in energy group inflation this month.

By bne IntelliNews December 4, 2013

The increase in LPG prices in early December will push annual inflation in energy group up in December, the Central Bank said on Wednesday in its monthly assessment on inflation.

Better-than-expected November inflation was due to favourable unprocessed food inflation and benign increase in clothing prices also contributed, the Central Bank said. As a result of these developments, the core inflation indicators followed a downward path, the Bank noted.

Consumer prices rose 0.01% m/m in November. The markets had expected a monthly inflation rate of 0.5%. This brought the annual CPI inflation rate to 7.32% from the previous month’s 7.71%.

Food prices fell 1.34% m/m in November for an annualised inflation of 9.77% and clothing prices rose 3.27% m/m.

One of the Central Bank’s main core inflation indicators (I-index which excludes the prices of energy, food & non-alcoholic beverages, alcoholic beverages, tobacco products and gold) rose 0.63% m/m in November after rising 1.78% m/m in October. The annual core inflation, consequently, decelerated to 7.22% from 7.49% in October.

The Central Bank expects inflation indicators to hover above the inflation target of 5% for some time due to the exchange rate volatility observed during the recent months.

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