Turkish consumer prices rises 1.63% m/m in April, more than market expects

By bne IntelliNews May 4, 2015

Consumer prices rose 1.63% m/m in April, bringing the annual inflation rate to 7.91% from 7.61% in March, data of the statistics office TUIK showed on May 4. The market had expected a CPI inflation of 1.43% m/m.

Food prices increased 1.63% m/m in April, adding 0.37 percentage points to headline inflation and the 12.30% m/m increase in clothing prices added another 0.85 percentage points. Communication prices fell 0.28% m/m in the month shaving off 0.01 percentage points from the headline CPI.

The core inflation, measured by the I-index, rose 2.03% m/m in April vs 0.61% m/m rise in the previous month. The annual increase in the I-index eased to 7% from 7.1% in March.

Domestic producer prices that increased 1.05% m/m in March rose by 1.43%, bringing the annual rise to 4.80% from 3.41%.

The central bank has recently 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%.

The bank has been warning about food prices. Prices of some food items are sensitive to the exchange rate and there are uncertainties over supply-side developments which necessitate caution against food inflation, said the central bank on April 30 in the minutes of the latest monetary policy committee meeting. Food prices remain as the main risk factor for the inflation forecast, and food inflation is expected to remain high in the short term, according to the bank. But it believes food prices are likely to see a notable correction upon the introduction of new-season products in the summer months.

April CPI by Main Expenditure Groups (%)
  Weights m/m y/y
Headline 100 1.63 7.91
Food and non-alcoholic beverages 24.25 1.63 14.36
Alcoholic beverages and tobacco 4.82 0.02 3.92
Clothing and footwear 7.38 12.30 5.15
Housing, utilities 15.79 0.41 8.21
Furnishings, household equipment 7.78 1.35 6.79
Health 2.57 0.29 7.75
Transportation 15.38 0.42 -0.52
Communications 4.38 -0.28 3.22
Recreation and culture 3.54 1.17 7.76
Education 2.53 0.88 7.88
Hotels, cafes and restaurants 6.98 1.27 13.34
Miscellaneous goods and services 4.60 1.24 9.90
Source: tuik      

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