CBRT releases February Price Developments Report: Annual inflation rose in all sub-groups

The Central Bank of the Republic of Turkey (CBRT) has released its February Price Developments Report.

According to the report, the main determinant of the monthly price increase in the energy group was fuel, following geopolitical developments in the Red Sea that raised oil prices and the course of the Turkish Lira.

While consumer prices rose by 4.53 percent last month, annual inflation increased by 2.21 points to 67.07 percent. In February, the impact of natural gas on monthly consumer inflation remained limited at 0.01 points.

PRICE INCREASES IN FOOD STRENGTHENED

The monthly price increase in the food group strengthened and spread across the board, and continued to negatively affect headline inflation both directly and indirectly through catering services.

The annual change rates of the B and C indices increased by 2.63 and 2.41 points, respectively, to 70.31 percent and 72.89 percent.

When examining the contributions to annual consumer inflation, the contributions of the services, food, and energy groups increased by 1.05, 0.90, and 0.30 points respectively compared to the previous month, while the contributions of the alcohol-tobacco-gold and core goods groups fell by 0.02 points each. When examined with seasonally adjusted data, the monthly increases in the B and C indices remained high, although they weakened compared to the previous month. Price increases in processed food, one of the groups forming the B index, strengthened compared to January, while they slowed down in the core goods and services groups.

Although the increase in service prices slowed to 5.66 percent in February compared to the previous month, it remained strong, and the group's annual inflation increased by 4.64 points to 94.36 percent. Monthly price increases spread across the group, and annual inflation rose in all sub-groups.

While the monthly increase in the rent sub-group, which rose significantly in January, remained strong at 7.06 percent, annual inflation in this sub-group reached 120.93 percent with an increase of 9.09 points.

The monthly price increase in the communication sub-group occurred at a high rate of 6.27 percent. Increases in mobile phone call and internet fees were decisive in this development.

INCREASE IN EDUCATION EXPENDITURES

In the other services sub-group, education, package tours, maintenance-repair, insurance, and health services prices stood out, and it was noted that the monthly price increase in education services, in particular, showed a high increase of 12.76 percent compared to the same period of the previous year due to private school fees.

While the effects of price increases in food, especially red meat, were decisive in the restaurant-hotel group, the reflection of fuel price developments was felt in transport services, which recorded a more moderate increase of 2.25 percent compared to other sub-items.

The annual inflation of the core goods group increased by 0.65 points to 54.0 percent. In February, annual inflation declined in durable goods while it rose in other sub-groups. While the monthly increase in durable goods (excluding gold) prices slowed significantly to 1.50 percent, the sub-group's annual inflation fell by 1.55 points to 58.98 percent. In February, furniture prices stood out within the sub-group with an increase of 3.91 percent, while white goods prices showed a limited increase of 1.82 percent and automobile prices 0.71 percent.

Prices in the other core goods sub-group rose by 2.74 percent, and annual inflation reached 54.95 percent with an increase of 2.41 points, while housing maintenance and repair, personal care products, and book prices were effective in the sub-group's monthly inflation.

While clothing and footwear prices remained relatively flat in February, the sub-group's annual inflation rose by 2.80 points to 42.39 percent.

While energy prices rose by 2.96 percent in February, the group's annual inflation increased by 3.06 points to 35.95 percent. With developments in Turkish Lira-denominated energy prices, fuel and bottled gas prices increased by 7.26 percent and 3.76 percent, respectively. Prices in other items followed a moderate course.

While the monthly price increase in the food and non-alcoholic beverages group strengthened to 8.25 percent compared to the previous month, annual inflation increased by 1.41 points to 71.12 percent.

While monthly price increases spread across sub-groups, annual inflation in unprocessed food fell by 2.94 points to 84.41 percent due to the high base effect. Processed food increased by 4.09 points to 60.42 percent.

With seasonally adjusted data, a high increase was observed in fresh fruit and vegetable prices, led by vegetable prices, in this period, following a partial correction observed in the previous month due to vegetables. While the rise in red meat prices continued in the other unprocessed food group, the increase in white meat prices accelerated slightly, and pulses and rice were other notable sub-items. Thus, unprocessed food prices rose by 9.30 percent on a monthly basis.

RISE IN RED MEAT CONTINUED

In the processed food group, where monthly inflation was 7.29 percent, price increases in bread-cereals strengthened, while high increases continued in processed meat products affected by red meat prices. Price increases in milk and dairy products due to the raw milk reference price adjustment were also significant in this period.

While domestic producer prices increased by 3.74 percent in February, annual inflation rose by 3.09 points to 47.29 percent. When examined according to main industrial groups, while prices in the energy sub-group remained flat on a monthly basis, they showed a significant increase in durable and non-durable consumer goods.

When monthly price developments are examined on a sectoral basis, it was observed that price increases were widespread, and refined petroleum products, furniture, food products and beverages, other mining and quarrying products, clothing, and wood and cork products were the prominent sub-groups.

News Source: AA