CBRT: Annual Inflation Increases in Food and Basic Goods, More Pronounced in Food, While Declining in Other Main Categories
The Central Bank reported that annual inflation increased in food and basic goods categories, particularly in food, while it declined in other main categories. The Central Bank of Turkey's Monthly Price Developments Report was published. The report stated, "The food group pulled monthly consumer inflation upward due to strong price increases related to unprocessed food in November, following October, while the monthly inflation excluding food showed a relatively positive outlook at 1.34%."
The report is as follows: "Consumer prices rose by 2.24% in November, while annual inflation dropped by 1.49 points to 47.09%. Annual inflation increased in food and basic goods categories, especially in food, while it declined in other main categories. The food group continued to exert strong price pressures on monthly consumer inflation in November due to unprocessed food, while monthly inflation excluding food presented a relatively positive outlook at 1.34%. Fresh fruits and vegetables, particularly vegetables, were the main items driving the price increase in the food group. The price increase in the basic goods group remained low. However, despite specific promotional discount periods, prices for white goods and electrical appliances continued to rise significantly. It was observed that prices for durable goods outside these items increased only slightly. The clothing and footwear sub-group, which exhibited seasonal price decreases, had a positive impact on the monthly inflation of basic goods. The service group's monthly price increase was moderate in November. This development was influenced by the substantial completion of relative price adjustments in items with seasonal pricing, as well as the positive outlook in relatively demand-sensitive service items. Although rent increases continued to be prominent in the service group, the seasonal decrease in contract renewal rates and the weakening rate of increase in contracts maintained a slowing trend. The increase in producer prices significantly weakened in November, with annual producer inflation continuing its downward trend. Under this view, consumer inflation followed a trajectory close to flat.
In November, consumer prices increased by 2.24%, and annual inflation fell by 1.49 points to 47.09%. When analyzed with seasonally adjusted data, it was observed that the monthly increase in consumer prices excluding food was more moderate compared to the headline inflation. The annual change rate of the B Index decreased by 1.42 points to 45.68%, while the C Index's annual change rate decreased by 0.62 points to 47.13%.
When examining the contributions to annual consumer inflation, the contributions of energy, services, and the alcohol-tobacco-gold groups decreased by 1.07, 0.72, and 0.41 points, respectively, while the contribution of the basic goods group remained unchanged, and the contribution of the food group increased by 0.71 points.
Compared to the previous month, monthly increases in seasonally adjusted data recorded limited rises in the B and C indicators. Price increases in processed food declined, remained stable in services, and showed some increase in basic goods. Distribution and model-based main trend indicators did not show a significant change compared to the previous month. Indicators monitored within the Central Bank indicated a trajectory close to flat in the main trend of inflation in November. It was also noted that distribution and model-based main trend indicators exhibited lower values compared to durable exclusion-based indicators like B and C.
Service prices increased by 1.61% in November, and the annual inflation of the group slowed down by 1.89 points to 67.89%. Annual inflation declined in all sub-groups except for transportation. The slowdown in monthly price increases in the service group observed in October continued into this period, resulting in the lowest monthly increase rate in the last three years. Although the rent group recorded a relatively high increase of 4.18% on a monthly basis, the decline in contract renewal rates and the decrease in the rate of increase in contracts indicated that rents slowed down compared to the previous month. Monthly inflation for services outside rent remained low at 0.90%. While monthly price increases in restaurant-hotel group meal services slowed, declines in accommodation prices continued, significantly weakening the group's monthly inflation to 0.79%. In November, transportation service prices exhibited a relatively flat increase (0.33%), while the communication sub-group, which strengthened relative to the previous month, recorded a monthly price increase (1.88%) due to rises in landline calls and internet fees. The moderate increase in other services group prices (0.97%) indicated that the slowdown in this group persisted.
In November, the annual inflation of the basic goods group rose by 0.45 points to 28.90%. On a monthly basis, basic goods inflation continued to remain low. Durable goods prices increased by 1.27%, and the group's annual inflation rose by 0.74 points to 23.84%. Within the sub-items, prices for white goods and consumer electronics rose significantly, while prices for automobiles and furniture remained relatively moderate. Prices in the clothing and footwear group decreased due to seasonal effects, and annual inflation in this group followed a relatively flat trend. Other basic goods prices increased due to the lingering effects of updated reference euro rates, alongside increases in cleaning supplies and personal care items related to homes.
Energy prices rose by 0.81% in November, and the group's annual inflation fell by 13.29 points to 46.08%. With contributions from developments in international oil prices, fuel prices remained relatively flat with a monthly increase of 0.24%. Solid fuels and liquefied gas prices increased.
In November, the impact of food prices on consumer inflation was prominent. On the other hand, monthly consumer inflation excluding food showed a moderate trend at 1.34%. The prices of the food and non-alcoholic beverages group increased by 5.10% during this period, raising annual inflation by 3.29 points to 48.57%. Annual inflation in the unprocessed food group surged by 12.74 points to 59.79%, while it declined by 4.62 points in the processed food group to 39.10%. Unprocessed food prices showed high monthly increases (9.00%), led by vegetables (29.55%) and eggs (14.10%). Processed food prices increased by 1.58%, showing slower growth compared to the previous month, with products like grains (excluding bread) and sugar-chocolate items being notable contributors.
Domestic producer prices increased by 0.66% in November, while annual inflation decreased by 2.77 points to 29.47%. During this period, in terms of major industrial groups, the price increase in the non-durable consumer goods category was 2.21%, while capital and intermediate goods (0.62% and 0.64%) and energy (-2.32%) were key groups restraining the headline rate.