World Bulletin / News Desk
Annualized consumer inflation saw a mild rebound to nearly 9 percent in June, indicating that meeting the year-end target of 5 percent will be a difficult task for the Central Bank of Turkey, even as crude prices remained much lower for the sixth month than they were at the beginning of the year.
The Turkish Statistics Institute (TurkStat) announced the monthly inflation figures on Tuesday.
According to its data, the Consumer Price Index (CPI) actually decreased by 0.9 percent from May to June, but was 8.87 percent higher than in the same month a year ago, representing a minor increase in the annualized rate, which was 8.2 percent a month earlier.
Among consumer goods in June, non-alcoholic beverages (3.42 percent), transportation (1.39 percent) and clothing and shoes (0.82 percent) saw a price reduction. At the other end of the scale, communication prices took the lead with a 1.92 percent hike in the sixth month over the fifth.
The June Producer Price Index (PPI) likewise dropped by 1.49 percent compared to May, and was 6.44 percent higher year-on-year. The annualized increase in PPI was 8.06 percent in May. Production costs increased for communication equipment (2.97 percent), potable water (2.13 percent) and furniture (1.89 percent) in June over May. Producers, however, paid notably fewer input cost in the fields of crude oil and natural gas extraction (8.63 percent), charcoal and refined petroleum products (7.04 percent).
Inflation in Turkey is dependent on multiple variables, but among them energy prices are generally game-changers. A barrel of crude was at nearly $80 for the month of June, compared to some $100 in January.
The major factor behind Turkey's intractably high consumer inflation is the rapid expansion of the gross domestic product (GDP) for the past decade. The national economy expanded by 5.4 percent on average each year between 2002 and 2011. Last year's 8.5 percent GDP growth, on top of the 8.9 percent increase recorded a year earlier, made Turkey the fastest-growing economy in all of Europe and within the larger Organization for Economic Cooperation and Development (OECD). For the first quarter of this year, however, the economic growth rate slowed to 3.2 percent, extending a helping hand to the policymakers as they try to beat inflation.
Central Bank Governor Erdem Başçı had predicted in April that people would see decreasing inflation in the country in the second half of 2012, and that the pace of decline would peak particularly in the last three months of the year.
EU Commission releases its first report on the progress Turkey has made towards lifting visa obligations for Turkish citizens
Series of deaths come amid pro-Kurdish protests around country
Press TV journalist dies after her car crashed into a construction vehicle near the border
Turkish Foreign Minister said that Turkey was facilitating the passage of Iraqi Kurdish peshmerga fighters to Kobani to aid Syrian Kurds
'If oil prices continue to decrease over the next year, Turkey's budget deficit will fall by 10 percent,' says energy min
Monday's papers covered a meeting on the "solution process" between the Turkish government and the 'wise men' delegation of experts
The Turkish Central Bank has disclosed that the private sector has seen its long-term foreign debt increase to $166.2 billion since December
12 countries along with host Turkey will gather in Istanbul for four days of military drills on Oct. 20
The Turkish president has appreciated the “Wise Men Committee” for its role in the settlement process with the outlawed Kurdistan Workers’ Party
Turkey has welcomed the finalization of Iraq's cabinet and termed it "an important step of an inclusive political beginning"
The leaders discussed the situation in Kobani, along with steps to fight the advance of ISIL militants.
Davutoglu describes Turkey's Kurdish solution process as a national and unique project that must be protected from 'foreign hands'
Medical team at Kapikule on Turkey-Bulgaria border trained and equipped to deal with the deadly disease, Governor of Edirne border province says
The Turkish president says his country will continue to mediate between Afghanistan and Pakistan; and the Turkish troops established a peaceful environment in Afghanistan just like it did in Kosovo, Bosnia and Somalia
John Bass, who was sworn in as the new US Ambassador to Turkey on October 7, says Turkey and the US are "long-time friends and strategic partners"
Republican People's Party says Istanbul prosecutor's decision to drop 'December 17' case shows 'justice has stopped' in Turkey