Turkey's inflation rate returns to two-digit

Turkey’s inflation rate returns to two-digit

Turkey's August inflation figures were higher than market expectations. Based on the data released by the State Institute of Statistics (DIE), inflation rate in wholesale prices (WPI) rose by 0.79% and increased by 0.58% in consumer prices (CPI) when compared with the figures of previous month. The core inflation rose by 1.5% in the mentioned period. Accordingly, year-on-year inflation rates increased to 10.52% in WPI and 10.04% in CPI. Due to seasonal factors, agricultural prices declined by only 2.5% in August, after falling by a strong 8.6% month-on-month in July. On the other hand, manufacturing sector prices soared by more than expected 1.8% on the back of public sector price hikes as well as increases by the private sector. On the CPI side, food prices increased by only 0.1%, whereas apparel prices declined by 3.2% due to discounts in the sector. There was an increase in services sector prices mainly due to the rise in health and education prices as a result of the pharmaceuticals' price increases and approaching school season. In the first eight months of the year, the year-to-date CPI and WPI were recorded as 3.9% and 7.3% respectively. This indicates that the government will not face problems in meeting its year-end target of 12%.