Inflation rate rises above estimates in November

ANKARA

REUTERS photo

Turkey’s annual inflation rate increased above estimates to 8.1 percent in November from 7.58 percent in October due to a sharp hike in footwear and clothing prices, according to data revealed by the Turkish Statistics Agency (TÜİK) on Dec. 3. 

The highest monthly increase was 5.37 percent in clothing and footwear, according to the TÜİK data. 

In November, the indices rose for food and non-alcoholic beverages by 1 percent, for furnishings and household equipment by 0.66 percent, for housing by 0.54 percent and for communications by 0.35 percent.

The current increasing trend in the inflation rate has been a crucial element that determines the Turkish Central Bank’s moves. Analysts expected the continuance of the rise in the short-term, adding that a decreasing trend will likely occur gradually due to several factors, such as an expected decrease in food prices amid the Russian sanctions on Turkish agricultural goods. 

In its most recent inflation report, the Central Bank said rising food prices were one of the most important inflationary pressures but were beginning to fall back. The report noted inflation has been stabilizing in Turkey for the past six months.

Annual inflation has ranged between about seven to eight percent during that period.      

“Due to the exchange rate pass through, Turkish inflation is set to rise in the first quarter, and then it is expected to fall back gradually next year,” said Atilla Yeşilada, an economist with Global Source Partners in Istanbul, as quoted by Anadolu Agency. 

Oyak Investment Chief Economist Mehmet Besimoğlu said the key components that pushed up the inflation rate was an increase in footwear and clothing prices in November, but the main point was seen in the core inflation index, which saw levels above 9 percent. 

“The Central Bank has however been decreasing its funding costs, showing that the bank has focused on exchange rates rather than the inflation rate. In this vein, we can see the inflation rate exceed our estimations at 8.5 percent by the yearend,” he said, as quoted by Reuters. 

The highest monthly decrease was observed by 0.78 percent in transportation in November. The indices declined for recreation and culture by 0.54 percent and for miscellaneous goods and services by 0.28 percent. 

The highest annual increase was 13.44 percent in hotels, cafes and restaurants, according to the TÜİK data.