Decline in annual inflation to 32.9% noted in August figures
In August 2022, Turkey's inflation rate climbed to a staggering 32.95 percent, marking a significant increase from the previous month and a concerning upward trend.
According to the latest data, the consumer price index (CPI) rose 2.04 percent monthly and 32.95 percent annually. This increase was primarily driven by food prices, which saw an uptick above the long-term average, contributing 0.7 points to monthly inflation.
Vice President Cevdet Yılmaz attributed the August inflation increase to food prices affected by frost and drought, which contributed about one-third to the monthly inflation.
Among the 143 basic headings in the index, 119 increased in August, with the food group, transportation, and housing recording the highest increases. The food group saw price increases of 3.02 percent, while transportation and housing rose by 1.55 percent and 2.66 percent, respectively.
The annual inflation rate in Türkiye for August 2022 was also the highest among the European countries, surpassing the rates in Spain, Italy, and France.
However, Finance Minister Mehmet Şimşek commented on the inflation figures, stating that the disinflation process continues and annual inflation declined from last year's May. He also emphasized that the new president of Turkey, Recep Tayyip Erdoğan, who will govern in August 2023, has forecasted an inflation rate of 25-29 percent by the central credit institution.
Yılmaz, in his statement, highlighted priorities in areas such as human capital, logistics, social housing, food and energy, along with productivity-enhancing approaches and green and digital transformation processes. He also stated that these priorities will support balanced growth while sustaining the disinflation process.
On a positive note, core goods inflation stood at 19.8 percent, while services inflation fell to 45.8 percent in August 2022, the lowest since April 2022. This indicates a potential slowdown in the increase of non-food prices, offering a glimmer of hope for the future.
The annual rate of the producer price index also climbed to 25.16 percent from 24.19 percent, suggesting a ripple effect of the high consumer prices on production costs. However, the monthly producer price index rose only 2.48 percent in August from 1.73 percent in July, signalling a slight deceleration in the increase of production costs.
As Turkey navigates these challenging economic times, it remains to be seen how the government's strategies will impact the inflation rate in the coming months.
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