Energy prices in Turkey rose by 1.11% in January 2020
According to the news published by Central Bank of Republic of Turkey, in January, consumer prices rose by 1.35%, while annual inflation was up by 0.31 points to 12.15%. Meanwhile, the annual rate of change in the B and C indices rose by 0.17 and 0.07 points to 10.93% and 9.88%, respectively.
Across subcategories, the contribution of energy, gold and services groups to annual consumer inflation increased month-on-month by 0.66, 0.06, 0.05 points, respectively, while that of food, core goods and alcohol-tobacco groups decreased by 0.34, 0.07 and 0.05 points, respectively.
Three-month averages of seasonally adjusted core inflation indicators suggest a somewhat rise in the trend of the B and C indices. In this period, the trend of the services group posted an uptick, whereas that of the core goods group decreased amid the VAT reduction in furniture products. The upward trend of the B index was also triggered by developments in processed food prices.
In January, services prices increased by 2.00% and annual services inflation inched down to 12.20%. In this period, annual inflation declined in rents, transport services and communication but crept up in restaurants-hotels and remained relatively flat in other services. Monthly price developments reveal that an upsurge in prices was seen in items of the other services group that are inclined to backward-indexation, reflect the exchange rate effect, and the prices of which are set according to the re-valuation rate. This period was especially marked by price developments in subcategories such as health, maintenance and repair, and education. In the restaurants-hotels group, prices increased both in accommodation and catering services. Showing backward-indexation behavior, the rent group posted a monthly increase of 1.14%, with a stronger trend than past months.
Annual core goods inflation decreased by 0.13 points to 7.35% in January. In this period, annual inflation dropped in durable goods, rose in clothing and durable goods and remained flat in other core goods. The VAT reduction in furniture products (to 8% from 18%) was largely manifest in prices, pulling down the prices of durable goods by 0.94%. Meanwhile, the seasonal sale in the clothing and footwear group proved more limited compared to the previous year.
Energy prices rose by 1.11% in January. This rise was mainly due to the price hike of 5.97% in municipal water tariffs. Notwithstanding the fall in international oil prices, fuel prices increased by 0.55% due to exchange rate developments. Annual energy inflation rose by 6.16 points to 17.14% due to the low base effect led by the reduced prices in electricity, natural gas and municipal water in the same period of the previous year.
Source: Central Bank of Republic of Turkey / link: https://www.tcmb.gov.tr/wps/wcm/connect/69673969-4337-4dfc-8780-90bde7aff242/mpricejanuary20.pdf?MOD=AJPERES
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.
