Turkey's annual inflation rate stands at 10.26 percent in February


Turkey's annual inflation rate reached 10.26 percent in February, down from 10.35 percent in January, the Turkish Statistical Institute (TurkStat) announced Monday.

The consumer price index (CPI) saw a monthly rise of 0.73 percent in February, 1.76 percent since December of the previous year and 11.23 percent on the twelve months moving averages basis.

According to a group of economists polled by Anadolu Agency last Thursday, Turkey's annual inflation rate had been expected to fall to 10.03 percent in February. The median of estimates for February by 20 economists was a 0.52 percent rise compared with the previous month.

The highest monthly increase was in health category with 2.57 percent, followed by food and non-alcoholic beverages with 2.24 percent, recreation and culture with 1.89 percent, furnishing and household equipment with 1.23 percent and hotels, cafes and restaurants with 0.95 percent.

The only monthly decrease was in clothing and footwear in category with 4.09 percent.

The highest annual increase was in furnishing and household equipment with 15.66 percent, followed by transportation with 13.19 percent, clothing and footwear with 11.77 percent, hotels, cafes and restaurants with 11.53 percent and education with 10.88 percent.

Within average prices of 407 items in the index, average prices of 32 items remained unchanged while average prices of 269 items increased and average prices of 106 items decreased.

Hilmi Yavaş, an economist at Seker Invest, told Anadolu Agency that despite the horizontal course of the Turkish lira, an upward trend in core goods still continues.

"We do not see any significant signal that would make cumulative currency to slow down," Yavaş said.

"All those developments indicate that we should be ready for negative surprises for core inflation rate in spring."

Muammer Kömürcüoğlu, an economist at İş Investment, said in a client note that monthly inflation rate, due to ongoing rise in food prices, surprised the market.

"Hence, annual inflation continued to linger around double digits in February," Kömürcüoğlu said.

He noted that ongoing higher inflation trend will weigh on expectations and pricing behavior.

"In this regard, we expect Central Bank to renew its rhetoric that tight monetary policy stance will be maintained due to inflation outlook," Kömürcüoğlu said.

He also projected the year-end inflation rate for 2018 to remain above 10 percent.

The February figure was at the lowest level during the last seven months. Last year, the highest annual rise in consumer prices was recorded in November with 12.98 percent, also the highest level since 2005.

In 2017, the lowest annual inflation was seen in January with 9.22 percent, while the minimum rise in consumer prices in 13 years from 2005 to 2017 was seen in March 2011, with 3.99 percent.

The Central Bank announced last month that it raised Turkey's year-end inflation forecast from 7 percent to 7.9 percent under a tight monetary policy stance.

The bank expects the inflation rate to fluctuate between 6.5 percent and 9.3 percent through to the end of 2018, and the figure would stabilize at around 5 percent in the medium term.

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