Turkish March inflation comes in at 1.13% m/m, above expectations.

By bne IntelliNews April 3, 2014

Consumer prices rose 1.13% m/m in March, the statistics institute TUIK announced on Thursday. This is well above the market consensus forecast of 0.85% m/m. CPI inflation was 0.43% m/m in February.

Annual inflation, consequently, quickened to 8.39% in March from 7.89% in February. Food prices were up 2.1% m/m (10.12% y/y) in the month, adding 0.51 points to the headline inflation. Food inflation was 0.13% m/m in February. Clothing prices rose 2.49% m/m, adding another 0.18ppt to the headline inflation. Transportation costs increased 0.88% m/m in the month, leading to an annual inflation of 13.74% for this item. Automobile prices rose 4.47% m/m, data of TUIK also showed.

All major core inflation indexes showed noticeable increases in March. 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) rose 1.2% m/m (9.32 y/y).

TUIK data also showed that the rate of increase in domestic producer prices eased to 0.74% m/m in March from 1.38% m/m in February. The annual inflation in producer prices decelerated to 12.31% from 12.4%.

On the back of March data, the annual inflation remained above the government’s 2014 target of 5%. The Central Bank already said it did not expect any decline in inflation until June, underlining upward risks on the inflation outlook, and lagged impact of the exchange pass-through on core inflation.

March CPI by Main Expenditure Groups (%)
  Weights m/m y/y
Headline 100 1.13 8.39
Food and non-alcoholic beverages 24.45 2.10 10.12
Alcoholic beverages and tobacco 5.29 -0.02 3.10
Clothing and footwear 7.17 2.49 7.30
Housing, utilities 16.41 0.23 4.84
Furnishings, household equipment 7.52 0.90 7.64
Health 2.44 0.85 7.02
Transportation 15.54 0.88 13.74
Communications 4.70 0.27 0.88
Recreation and culture 3.36 0.68 7.97
Education 2.26 0.19 9.98
Hotels, cafes and restaurants 6.58 1.33 12.51
Miscellaneous goods and services 4.28 1.20 5.27
Source: tuik      

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