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Turkey’s annual inflation back to one digit in May
TurkStat announced on Thursday that consumer prices dropped by 0.36 percent and producer prices by 1.15 percent in May over the preceding month. The inflation report revealed that annual inflation as of May was 9.10 percent for consumer prices and 9.21 percent for producer prices. The inflation figures are well below market expectations; the central bank had earlier announced that they expected a 0.6 percent rise in consumer prices in May over a month before. Observers argued that the decline in annual inflation could be attributed to the drop in food prices in the market. The consumer prices for food and non-alcoholic beverages declined by 4.38 percent in May over April.
The monthly change in inflation for consumer prices in May 2009 was 5.24 percent, while producer prices experienced a 2.46 percent rise over the same month of 2008.
Domestic holiday packages experienced the highest monthly increase in price with a 26.36 percent rise in May over the preceding month. This was followed by lemons, which saw a 13.4 percent increase in price in the same period. Green peppers had the highest decline in price in May over April with 52.4 percent and were followed by onions with a 44.8 percent decline.
The 12-month moving average inflation rate was 7.2 percent for the consumer price index (CPI) and 3.5 percent for the producer price index (PPI).
The central bank had earlier said the core indices have shown that inflation will decrease and that they expect it to decline further once the base effect weakens in the next few months. Excluding tax effects, a recent central bank report stated that there is no increase in the underlying inflation trend, and hence, core inflation would continue to remain at levels below the end-year target. The bank revised its inflation expectation upwards to a midpoint of 8.4 percent at the end of 2010.
Clothing and footwear saw the largest increase in the CPI, 11.6 percent, in May over the previous month.
The CPI rose by 1.97 percent for miscellaneous goods and services, 0.9 percent for hotels, cafes and restaurants, 0.6 percent for education and 0.39 percent for housing. The index declined 0.01 percent for alcoholic beverages and tobacco, 0.02 percent for health services and 0.03 percent for transportation.
Customers were also curious to see the change in the price of meat and milk following previous fluctuations. Successive price hikes in red meat had earlier led to problems in the dairy market as well; the government considered intervening in the markets. The latest TurkStat report showed that the price of red meat saw a decline of 6.65 percent in May over April, while the price of milk declined by 4.07 percent, sending signals of normalization.
The highest year-on-year rise was seen in the CPI for alcoholic beverages and tobacco with 42.96 percent when compared with the same month of the previous year.
The agriculture sector saw a 5.6 percent decline in the PPI in May over the previous month, while the industrial sector saw a 0.08 percent drop.
The highest monthly increase in the PPI of industrial activities was recorded as 5.36 percent in crude petroleum and natural gas production. The manufacturing sector saw a 0.92 percent monthly increase in its PPI, while the mining sector index increased by 0.38 percent and utilities increased by 0.19 percent in May compared to the previous month.
The PPI increased 2.82 percent for mining and stone quarrying while manufacturing industry saw a 0.31 percent decline in May over April.
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