World Bulletin / News Desk
Consumer prices increased by 0.41 percent in January, bringing the annualized rate of inflation to 4.9 percent, a 41-year low, the Turkish Statistics Institute (TurkStat) said on Thursday.
According to data released Thursday, the Consumer Price Index (CPI) was 4.90 percent in January 2011, while the Producer Price Index (PPI) came in at 10.80 percent. This means the country's inflation fell below a 41-year low in December 2010, supporting the central bank's policy of cutting interest rates and increasing reserve requirements. The year-end inflation rate was 6.4 percent in 2010. Moreover, the monthly CPI increased by 0.41 percent in January 2011 while factory gate prices -- PPI -- were up by 2.36 percent in the same month.
The central bank's monthly CPI expectation in January was 0.59 percent and the yearly inflation rate 6.55 percent. According to this, CPI data for January were below the central bank's expectations while the PPI was higher than expected. The central bank also said in a previous statement that it will target an inflation rate of 5.5 percent in 2011 and 5 percent in 2012.
Speaking to the Bloomberg HT business news channel, Professor Taner Berksoy from the İstanbul-based Bahçeşehir University said the moderate increase in inflation last month is not an issue the Turkish economy should worry about and that it occurred largely due to the increase in the price of commodities on which the Turkish market has no impact, such as energy prices. He added that Turkey may in 2011 see a higher inflation figure than last year's 41-year low of 6.4 percent as the base effect will start to fade by the end of the first quarter of this year.
Compared to December 2010, the highest price increase occurred in the restaurants and hotels group, with 9.38 percent in January of this year. Other groups where CPI prices rose were the food and beverage group (7.06 percent), apparel and shoes (5.24 percent) and transportation (4.63 percent).
Yields on benchmark two-year lira bonds rose after the figure missed the market's estimate. Yields were seven basis points higher at 8.14 percent as of 10:14 a.m. in İstanbul. The lira remained unchanged at 1.5766 per dollar.
Last Mod: 04 Şubat 2011, 12:35