Turkish consumer prices rise 0.43% m/m in February.

By bne IntelliNews March 3, 2014

Consumer prices rose 0.43% m/m in February, slightly higher than the market consensus forecast of 0.41%, data of the statistics institute TUIK showed on Monday. The monthly CPI inflation was 1.98% in January.

The annual inflation rate accelerated to 7.89% from 7.75% in January, remaining well above the government’s 2014 target of 5%. Food prices rose 0.13% m/m, adding 0.03ppt to the monthly rise in headline inflation while alcoholic beverages & tobacco prices increased 0.02% m/m. Clothing prices were down 5.06% m/m but transportations costs rose 2.29% m/m, adding 0.39ppt to the headline inflation. Communication prices increased 0.19% m/m in February. Automobile prices rose 4.43% m/m, TUIK data showed.

One of the Central Bank’s favourite core inflation indicators, the so-called I-Index (which excluded the prices of energy, food and non-alcoholic beverages, alcoholic beverages and tobacco products and gold) posted a monthly increase of 0.7% for an annualised rise of 8.43%.

TUIK also said that domestic producer price index rose 1.38% m/m in February after it increased 3.32% m/m in the previous month but the annual rise accelerated to 12.4% from 10.72% in January.

Factors affecting inflation adversely will keep inflation indicators considerably above the 5% target for a while, the Central Bank said recently. External uncertainties coupled with the elevated domestic uncertainties caused additional exchange rate movements, which weighed on the risk of inflation exceeding the target for a protracted period, the Bank stressed. Moreover, the recent tax adjustments and the persisting unfavourable course of food prices also exacerbated the deterioration in the inflation outlook, according to the Bank.

Related Articles

Turkey’s CDS at 1-month-high and lira weakest in 3 months as economic clouds gather

The cost of insuring exposure to Turkish debt grew to a one-month high on March 16 as anxieties about Turkey’s economic difficulties and the Afrin military showdown in Syria unsettled markets. ... more

Turkish bond prices fall and lira sinks as economic and political jitters grow

Turkish bond prices fell on March 13 as a growing set of economic and political anxieties left investors fretting. To add ... more

Billion-dollar petrochemical facility to be built in Turkey by Algeria's Sonatrach

Algerian national energy company Sonatrach has struck a deal with Turkey's Ronesans and Bayegan to build a petrochemical plant worth $1bn in Turkey, Turkish President Recep Tayyip Erdogan said on ... more