The Central Bank of the Republic of Turkiye (CBRT) reported that while annual inflation increased in core goods and energy in January, it decreased in other main groups.
CBRT’s January Price Developments Report has been published.
According to the report, the monthly increase in producer prices in January strengthened in line with cost developments, while annual producer inflation remained flat.
Following the rise in January, it is estimated that the main trend of inflation will weaken in the following period.
While consumer prices increased by 6.70% last month, annual inflation increased by a limited rate of 0.09 points and reached 64.86%. In January, the effect of natural gas on monthly consumer inflation was 0.23 points, and its effect on annual inflation was 0.35 points.
There was an increase in consumer inflation, adjusted for seasonality and natural gas effects, compared to previous months.
During this period, the annual change rates of B and C indices decreased by 0.34 and 0.16 points, respectively, to 67.68% and 70.48%.
Turkish Statistical Institute (TUIK) updates the consumption basket and weight structure at the beginning of each year, taking into account the changes in household consumption patterns. Accordingly, while the weight of food and more specifically energy subgroups in the basket decreased in 2024, the weight of basic goods and services groups increased.
In this direction, the weights of indicators B and C increased by 1.89 and 3.35 points, reaching 72.82% and 59.55%, respectively. When the contributions to annual consumer inflation are examined, the contributions of energy and services groups increased by 0.61 and 0.58 points, respectively, in this period, while the contributions of food, alcohol-tobacco-gold and basic goods groups decreased by 0.72, 0.26 and 0.12 points, respectively.
When examined with seasonally adjusted data, monthly increases increased significantly in B and C indices compared to the previous month.
While the price increases spread across the groups that make up the B index, the increase in the services group stood out. While service prices increased significantly by 12.14% in January, the group’s annual inflation decreased by 0.94 points to 89.72%.
Monthly price increases spread throughout the group, annual inflation increased in rent and transportation services, and decreased in other subgroups, most notably in communications.
In the high monthly increase of 14.99% in other services, the impact of increases in health services, where indexing to past inflation and time-dependent pricing behavior is common, items subject to revaluation, maintenance and repair including material and labor expenses, as well as entertainment-culture and insurance services, was felt.
The monthly increase in the rent group strengthened significantly.
According to the report, the monthly increase in the restaurant hotel subgroup, where the developments in minimum wage and food prices, especially red meat, are reflected, was high at 12.17%.
While the monthly increase in the rent group strengthened significantly with 11.46% due to the effects of the increase in the number of contract renewals, annual inflation in this group increased by 3.26 points to 111.84%.
The communications subgroup differentiated itself from the overall services group with a relatively moderate increase rate of 2.37%. Annual inflation in the core goods group reached 53.35%, with a limited increase of 0.54 points.
While annual inflation increased in other core goods in January, it remained flat in the remaining subgroups. Durable goods (excluding gold) prices increased by 4.80%, and annual subgroup inflation decreased by 0.17 points to 60.53%.
While furniture prices increased by 10.61% in January, white goods and automobile prices increased by 6.53% and 2.78%, respectively.
With the increase in prices of 5.48% in the other basic goods subgroup, annual inflation increased by 2.12 points to 52.54%. It was observed that strong price increases spread throughout the subgroup.
With seasonal effects, prices in the clothing and shoes subgroup decreased by 1.86%, while annual inflation decreased by 0.15 points to 39.59%.
Energy prices increased by 6.14% in January, and the group’s annual inflation increased by 5.70 points and reached 32.89%. The effects of natural gas consumption developments continued to be evident in the group’s monthly price increase.
With the reflection of the PPI increase in the second half of 2023 to the Special Consumption Tax as of January and the developments in Turkish lira denominated energy prices, fuel oil and bottled gas prices increased by 7.82% and 10.75%, respectively.
The increase in mains water prices was 4.89%. While food and non-alcoholic beverages group prices increased by 5.19% in January, annual inflation decreased by 2.30 points to 69.71% due to the high base effect.
Red meat prices continued to increase
Annual inflation decreased by 3.88 points in unprocessed food and 1.72 points in processed food, reaching 87.35% and 56.33%, respectively. With seasonally adjusted data, a partial correction was observed in fresh fruit and vegetable prices, which increased in the previous month, led by vegetable prices, due to vegetables in this period.
While red meat prices continued to rise in the other unprocessed food group, potatoes and pulses were other items that attracted attention.
Thus, monthly inflation of unprocessed food was 7.01%. In the processed food group, price increases in bread and grains became stronger, while processed meat products were identified as the other prominent item.
While alcoholic beverages and tobacco prices increased by 4.92%, annual inflation decreased by 9.66 points to 61.60%. The tax adjustment resulting from the D-PPI increase was the main factor that pushed prices up.
As a result of the tax reform on tobacco products, the price increase was seen in a more limited way. While domestic producer prices increased by 4.14% in January, annual inflation followed a flat course and reached 44.20%. Considering the main industrial groups, energy prices decreased in January, while price increases became stronger in other subgroups.
On the other hand, annual inflation decreased in all subgroups except the intermediate goods item. When monthly price developments are examined on a sectoral basis, it is observed that the price increases are widespread, while basic pharmacy, printing and recording services, machinery equipment, other mining and paper and paper products items come to the fore.
Source: Dunya.com / Prepared by Irem Yildiz