The Central Bank explained the reasons for the rise in inflation

In the CBRT’s inflation assessment, it was stated that the increase in annual consumer inflation spread across sub-groups, while the most significant contribution to this development came from energy and services groups, especially food.

The Central Bank of the Republic of Turkey (CBRT) touched upon the food, energy and services groups in its April inflation assessment. In the evaluation, “Consumer prices increased by 7.25 percent in April, annual inflation increased by 8.83 points to 69.97 percent. International commodity prices and supply problems continued to put pressure on consumer prices. In this period, the increase in consumer annual inflation was lower. “The most significant contribution to this development came from energy and services groups, especially food. The rise in annual inflation in the food group continued across sub-items, and fresh fruit and vegetable prices, which were almost flat in the previous month, increased sharply in this period,” it said.

According to the assessment, energy inflation increased significantly, led by developments in managed/directed items such as natural gas and network water. In this period, annual inflation in the services group increased across subgroups, and transportation and restaurants-hotels continued to be the prominent groups in line with the outlook in energy and food prices. While annual inflation in core goods increased in durable goods, it decreased in other subgroups. It was observed that the VAT reduction applied to certain products was reflected in the prices, and this development had a positive impact on the prices of other core goods. Producer prices continued to rise as a result of the continuing high course in international commodity prices, increases in domestic energy prices and disruptions in supply chains. Under this outlook, annual inflation of indicators B and C continued to rise.

In April, consumer prices rose by 7.25 percent and annual inflation increased by 8.83 points to 69.97 percent. When the contributions of subgroups to annual consumer inflation are analyzed, the contributions of food, energy, services, basic goods, alcohol-tobacco and gold groups are 4.65, respectively; 1.62; 1.48; It increased by 0.91 and 0.17 points.

When analyzed with seasonally adjusted data, monthly increase increased in B index compared to the previous month, while it decreased slightly in C index. While monthly price increases increased in the services and processed food groups that make up the B index, they slowed down a bit in the core goods group. Prices of services rose by 4.74 percent in April, and the group’s annual inflation reached 42.18 percent with an increase of 5.46 points. While annual inflation increased in all subgroups, the increases in transportation services and restaurants and hotels were more pronounced. The cumulative increases in fuel prices continued to adversely affect the outlook in transportation services, and the group’s annual inflation rose to 78 percent as prices rose by 11.35 percent.

In the transportation group, high increases were observed in both intercity and urban passenger transportation. Another sector negatively affected by input costs was restaurants-hotels, and the group’s annual inflation was 69.26 percent, with prices increasing by 6.95 percent, led by catering services.

When analyzed with seasonally adjusted data, it is observed that monthly increases in rents maintained their flat course in April. Annual core goods inflation increased by 2.39 percentage points to 61.58 percent in April. In this period, annual inflation increased in durable goods group and decreased in other subgroups. Prices of durable goods (excluding gold) increased by 5.11 percent in April, while furniture prices stood out with an increase of 12.18 percent, while automobile (4.12%) and white goods (4.22%) prices also increased.

With these developments, annual inflation in durable goods reached 74.62 percent. In the other basic goods group, price increases in housing maintenance-repair, entertainment-culture and household-related products stood out, while the decrease in VAT rate from 18 percent to 8 percent in basic hygiene products limited the group inflation. The monthly price increase in the clothing and footwear group (7.02%) was slightly lower than the previous year, and annual inflation fell by 0.79 points to 25.75 percent in April.

Energy prices increased by 7.62 percent in April, and the group’s annual inflation rose by 15.26 points to 118.20 percent. Natural gas and mains water prices, which are managed and managed items, rose by 27.92 and 14.22 percent, respectively, and became the main determinant in this development. In this period, the increases in fuel, solid fuel and bottled gas prices continued. Food and non-alcoholic beverage prices increased by 13.38 percent in April, and the group’s annual inflation rose by 18.77 points to 89.10 percent.

High levels in international agricultural commodity prices, adverse weather conditions and rising input costs put pressure on the sector. As a result of these developments, general price increases occurred, while annual inflation was 100.67 percent in unprocessed food and 78.09 percent in processed food. Seasonally adjusted data indicated that the prices of fresh fruits and vegetables in unprocessed food rose significantly.

In the other unprocessed food subgroup, red and white meat, which was adversely affected by feed prices, and milk, which was affected by the reference price regulation, as well as potatoes and rice, stood out with high price increases. High price increases in unprocessed food items also negatively affected related processed food items. In this group, annual inflation in the sub-item became 85.81 percent, with the prices of bread and cereals increasing by 6.30 percent.

Among other processed food items, high price increases in cheese and other dairy products, sugar and sugar-related products, fats and oils, soft drinks and meat products were noted. Prices of alcoholic beverages and tobacco products increased by 4.02 percent in April, and annual inflation rose to 56.38 percent.

In this development, the lingering effects of the increase in cigarette prices caused by the manufacturers in March were observed. Domestic producer prices increased by 7.67 percent in April, and annual inflation increased by 6.85 points to 121.82 percent. High levels of commodity prices, disruptions in supply chains and increases in domestic energy costs continued to adversely affect producer prices. Analyzing by main industry groups, annual inflation was almost flat in intermediate goods, while it increased in other sub-groups. While price increases spread across sub-items, increases in coal and lignite, crude oil-natural gas, water and water purification, electricity, non-metallic mineral products related to the construction sector, food products, printing-registration services, furniture and wood products came to the fore.


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Source: bigpara- GÜNDEM by bigpara.hurriyet.com.tr.

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