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Thursday, 04 October 2018 03:26

Inflation in Turkey increases to 24.5% in September 2018

Consumer Prices Index Consumer Prices Index

The Turkish Statistical Institute today published the Consumer Prices Index (CPI) numbers for September 2018.

As expected they make for uncomfortable reading.  Last month the rate of inflation increased by a massive 6.62% to reach an annual rate of 24.52% - the highest rate seen for fifteen years.

Looking at the year on year increases in specific areas, furnishing and household equipment costs increased by 37.28%; transportation costs rose by 36.61%; miscellaneous goods and services rose 30.61%; food and non-alcoholic beverages went up 27.70% and housing, water, electricity and gas increased by 21.84%.

CPI September 2018

Source: Turkish Statistical Institute

On Monday 1st October electricity and gas prices were increased for the third consecutive month. Electricity prices went up 8% for domestic consumers and businesses were hit with a 15% increase.  Natural gas prices increased by 9% for domestic customers and 18.5% for businesses. 

Producer Price Index (PPI)
Meanwhile the Producer Price Index (PPI) increased by 46.15% year on year - a monthly increase of almost 11%, which would tend to suggest that CPI is likely to rise still further over the coming months as rising production costs feed through to consumers.

On 13th September the Central Bank of Turkey increased it's lending rate by 6.25% in an attempt to support the Turkish lira which has devalued significantly against major currencies this year.  Bank savings in Turkish lira are now attracting gross rates in excess of 25%.

These latest CPI and PPI figures demonstrate the very serious ongoing economic difficulties facing our Turkish friends. 

 

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Katie-Ellen

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