Investing.com – The rate announced yesterday rose by 1.25 percent in December, with annual inflation rising 0.57 points to close 2020 at 14.60 percent. The CBRT published its ‘Monthly Price Developments’ report, in which it evaluates the latest inflation figures of the year, and it was stated in the report that the lagged effect of the exchange rate continues, and it was pointed out that the recent hikes had an effect on inflation.
Explanations of the center:
“While core goods were the main determinant of the increase in annual inflation, the divergence in durable goods and clothing continued. Cumulative in durable goods exchange rate effects, demand conditions and developments in international metal prices. Accordingly, price increases remained strong across sub-items. Under this outlook, the annual inflation and trends of B and C indicators increased. In this period, energy inflation increased with the increase in oil prices, while the increase in services inflation remained relatively limited. Although annual inflation in the food group declined slightly due to the base effect, prices continued to increase due to the developments in prices of agricultural commodities, which are basic inputs.
Prices of services increased by 0.59 percent in December, and the group’s annual inflation rose by 0.24 points to 11.66 percent. Annual inflation remained flat in restaurants-hotels and transportation services, while it increased in other sub-groups. Seasonally adjusted data point to a slight slowdown in the monthly increase in the restaurant-hotel group, especially in the accommodation group. In terms of communication services prices Internet fee-induced increase has been recorded. Increases in health services, insurance and attorney fees were prominent in the other services group..
Energy prices increased by 1.47 percent in December. In this period, fuel prices rose by 3.50 percent following international oil prices, while solid fuels and natural gas prices rose by 0.75 percent and 0.68 percent, respectively. With these developments, annual energy inflation increased by 1.36 points to 5.64 percent. In January, electricity, natural gas and Istanbul water supply price adjustments will have an impact on group inflation.
Despite the 2.53 percent increase in the food and non-alcoholic beverages group in December, the group’s annual inflation fell by 0.47 points due to the base effect and became 20.61 percent. In this period, annual inflation in the unprocessed food group decreased by 0.68 points to 26.34 percent, and in the processed food group to 15.52 percent with a 0.40 point decrease. Seasonally adjusted data in the unprocessed food group, It pointed to an increase in prices of fresh fruits and vegetables, particularly in fresh fruit. In other unprocessed food, the rapid price increases in eggs (12.86 percent), rice (5.75 percent), chicken meat (5.49 percent) and legumes (2.62 percent) continued in December and the annual inflation was quite high. It has been observed to watch at levels. During this period, the monthly price increase in processed food, which saw price increases widespread, was 1.70 percent. With the reflection of international wheat prices, the bread and cereals group increased by 1.61 percent, while fat and oil prices rose by 5.09 percent due to the lagged effects of the exchange rate and international prices. With these developments, annual inflation in the food group excluding fresh fruits and vegetables slightly declined to 18.06 percent. In sum, despite the base effect-driven decline in annual food inflation, the lagged effects of the exchange rate and the course of international agricultural commodity prices continued to be influential. “
Author: Deniz Engin
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