Turkish consumer prices fall 0.5% m/m in June

By bne IntelliNews July 3, 2015

Consumer prices fell 0.51% m/m in June as food prices declined, data of the statistics office TUIK showed on July 3.

The markets had expected headline CPI inflation to decline by 0.25% m/m.

The annual inflation rate, consequently, slowed to 7.2% in June from 8.09% in May.

Volatile food prices declined 2.79% m/m in the month, shaving off 0.69 percentage points from headline inflation while clothing prices fell 1.32% m/m, subtracting a further 0.1 percentage points.

Amid the increase in product supply, correction in food prices would be more pronounced in June, the central bank had predicted last week. But, the also warned that although a partial correction in food prices is expected to ease inflation in the short term, the recent exchange rate movements have delayed the improvement in core inflation.

The core inflation, measured by the central bank’s favourite I-index, rose 0.33% m/m in June, bringing the annual increase in the I-index to 7.51%.

According to data from TUIK, recreation & culture prices increased 2.64% m/m, adding 0.1 percentage points to headline inflation while communication prices rose 0.04% m/m and transportation costs fell 0.01% m/m.

The central bank recently warned that the inflation outlook has yet to display the desired improvement. In April, the bank raised its inflation forecast for 2015 to 6.8% from a previous 5.5%, citing a weak lira and high oil prices. The bank also lifted its 2016 inflation forecast to 5.5% from a previous 5%.

Domestic producer prices rose 0.25% m/m in June, bringing the annual rise in producer prices to 6.73% from 6.52% in May, TUIK also said.

June CPI by Main Expenditure Groups (%)
  Weights m/m y/y
Headline 100 -0.51 7.20
Food and non-alcoholic beverages 24.25 -2.79 9.28
Alcoholic beverages and tobacco 4.82 -0.01 4.13
Clothing and footwear 7.38 -1.32 5.92
Housing, utilities 15.79 0.30 8.39
Furnishings, household equipment 7.78 -0.09 7.23
Health 2.57 0.53 6.48
Transportation 15.38 -0.01 1.23
Communications 4.38 0.04 3.13
Recreation and culture 3.54 2.64 11.13
Education 2.53 0.70 6.24
Hotels, cafes and restaurants 6.98 1.09 13.62
Miscellaneous goods and services 4.60 0.79 9.89
Source: tuik      

Related Articles

Turkey to refuse extradition of all suspects to US unless Washington hands over Gulen says Erdogan

Turkey will not extradite any terror suspects to the US if Washington continues to refuse to hand over Fethullah Gulen, President Recep Tayyip Erdogan said on January 11. Ankara blames the ... more

Record decline in Turkish central bank’s gross forex reserves pushes holdings to $89.9bn

The Turkish central bank reported on December 7 that its gross forex reserves last week experienced a record drop, declining to $89.85bn on December 1 from $96.35bn a week earlier. ... more

EU governments reportedly agree to cut Turkey’s pre-accession funds

EU governments have agreed with the European Parliament to withdraw €105mn that would have gone to help finance political ... more

Dismiss