Turkey's consumer price index rose by 0.52 percent in August, while annual inflation hit double digits at 10.68 percent, up from 9.79 percent in July, the Turkish Statistical Institute (TurkStat) said Tuesday.
On Monday, Anadolu Agency's Finance Desk's survey of 14 economists predicted an average 0.15 percent increase in the monthly rate and an annual rate of 10.27 percent. The economists forecast year-end inflation rate at 9.38 percent.
TurkStat's report showed the highest monthly rise was in the education sector which saw a 2.79 percent increase in prices as the new school year nears. It was followed by transportation category with 2.05 percent, furnishing and household equipment with 1.66 percent, hotels, cafes and restaurants with 1.03 percent and housing and miscellaneous goods and services with 0.71 percent.
The highest monthly decrease was in clothing and footwear category with 3.09 percent. A decrease by 0.22 percent was also reported for the food and nonalcoholic beverages category.
The highest annual increase was in transportation category with 17.38 percent, followed by food and nonalcoholic beverages with 11.97 percent, health with 11.66 percent, recreation and culture with 11.19 percent and hotels, cafes and restaurants with 11.07 percent. The categories with top three increases constitute the main expenditure items for consumers and they are expected to effect the pay raise ratio for the private sector for 2018.
Timothy Ash, a senior emerging-market strategist at London-based BlueBay Asset Management, said in a client note that the extent of the increase was disappointing although an uptick was expected.
"The assumption was that inflation would begin to ease back to year-end, due to tax changes, but it will now be from a higher level," Ash wrote.
Ash added that the figures left little scope for the Turkish Central Bank to ease its current hawkish monetary policy stance any time soon.
Ziraat Bank economist Bora Tamer Yılmaz told Anadolu Agency higher-than-expected inflation numbers were driven by strong euro and higher commodity prices.
"Some consumer products in the Turkish market originate from Europe and many products are being priced in euros. Durable goods inflation has a higher sensitivity toward euro volatility," Yılmaz said.
Yılmaz also underlined the effect of the Eid al-Adha holiday on transport costs, especially air-fares, which increased significantly.
"Airfares have increased by 18.2 percent annually alongside with transportation group items," Yılmaz said.
He said he expected the Turkish Central Bank to hold on to its tight stance until improvements are visible in inflation statistics.
Şakir Turan, an economist at Odeabank, told Anadolu Agency that new fixed-weight methodology in inflation calculations, along with price adjustments ahead of the Eid- al-Adha holiday, led to the rise in headline inflation in the month.
"Even though we think government's recent measures to reduce the volatility in food prices may be effective in the medium-term," Turan said.
Turan added that the rise in inflation rate would continue in forthcoming months due to foreign exchange rates and cost factors.
Please click to read our informative text prepared pursuant to the Law on the Protection of Personal Data No. 6698 and to get information about the cookies used on our website in accordance with the relevant legislation.
6698 sayılı Kişisel Verilerin Korunması Kanunu uyarınca hazırlanmış aydınlatma metnimizi okumak ve sitemizde ilgili mevzuata uygun olarak kullanılan çerezlerle ilgili bilgi almak için lütfen tıklayınız.