Turkey’s January inflation figures surprise markets
The consumer price index (CPI) rose 0.55% in January, beating market expectations of 0.9%, while the newly incorporated price index (PPI) declined 0.41% in January, according to data from
Turkey's State Institute of Statistics (DIE). The PPI replaces the formerly used wholesale price index (WPI).
Accordingly, year-on-year PPI stood at 10.7% while year-on-year CPI declined to 9.23% in January.
It is seen that 1% fall in the
manufacturing prices and extremely low increase of 0.97% in the agricultural prices contributed to the surprising decline in the PPI.
The New Turkish Lira's (TRY) appreciation throughout January and the regress in oil prices kept inflationary pressures at bay.
In addition, the controlled movement of domestic demand and seasonal rebates played a significant role in the inflation rates. Finally, moderate increases in agriculture and food prices also contributed to the decline inflation rates.
Separately, there are some uncertainties regarding the February CPI inflation figure. Poor weather and a tax hike on alcohol and tobacco could adversely affect the CPI in February.