Turkish December CPI inflation comes in at 0.46% m/m.

By bne IntelliNews January 3, 2014

Consumer prices increased 0.46% m/m (market consensus forecast: 0.42% m/m) in December, the statistics institute said on Friday.

This brought the annual rate of inflation to 7.40% from 7.32% in the previous month. The government missed its 2013 official inflation target of 5% as it had been the case in 2012 (target: 5, actual end-year CPI:  6.2%) and 2011 (target: 5.5%, actual end-year CPI: 10.4%).

Food prices rose 1.46% m/m (9.67% annual inflation), transportation costs increased 1.1% m/m (9.77% annual inflation) in December while clothing prices fell 2.58% m/m and communication prices declined 0.13% m/m.

Impact of the depreciation of TRY was visible in the rise of energy items; LPG prices were up 12.14% m/m, cylinder-gas prices rose 9.35% m/m, diesel rose 1.6% m/m and gasoline increased 1.57% m/m.

Core inflation was benign. The Central Bank’s favourite core inflation indicator, the I-index (which excludes the prices of energy, food & non-alcoholic beverages, alcoholic beverages, tobacco products and gold) fell 0.11% m/m for an annualised rate of 7.08%. The I-index had increased 0.63% m/m in November and 1.78% m/m in October.

Inflation outlook has deteriorated. TRY has depreciated sharply especially in the second half the 2013 and the currency sank to record lows in December amid the heightened political risks. FX pass-through should take its toll on inflation. Higher energy costs should also be taken into account. On top of that, the government this week raised the special consumption tax on new cars, alcoholic drinks, mobile phones, and cigarettes. This is expected to push inflation by 1% to around 8% this year.

Producer prices rose 1.11% m/m in December after increasing 0.62% m/m in the previous month. The annual PPI inflation quickened to 6.97% from 5.67% in November.

In October, the Central Bank raised its end-2013 inflation forecast to 6.8% from a previous 6.2% and end-2014 forecast to 5.3% from a previous 5% due to exchange rate developments and oil prices.

December CPI by Main Expenditure Groups (%)
  Weights m/m y/y
Headline 100 0.46 7.40
Food and non-alcoholic beverages 24.09 1.46 9.67
Alcoholic beverages and tobacco 5.07 -2.66 10.52
Clothing and footwear 6.83 -2.58 4.87
Housing, utilities 16.68 0.89 4.84
Furnishings, household equipment 7.28 0.19 5.95
Health 2.22 0.78 4.85
Transportation 17.99 1.10 9.77
Communications 4.64 -0.13 1.20
Recreation and culture 2.95 0.19 5.18
Education 1.91 0.01 10.05
Hotels, cafes and restaurants 6.18 0.81 9.86
Miscellaneous goods and services 4.16 -0.01 2.24
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