The consumer price index (CPI / TÜFE in Turkish) rose by 2.0 percent in October, just above the 1.87 percent expectation of economists. Annual inflation decreased by 0.7 points from 9.26 percent to 8.55 percent. Thus, annual inflation fell to the lowest level of the last 3 years.
Experts have commented that the inflation is in line with market expectations and that inflation continued to decline compared to last year. They said, “The decline in inflation compared to the previous year was due to the continued decline in processed food prices and the fact that increases in other non-food groups remained moderate compared to the previous year when the exchange rate shock occurred”.
It is also stated that the decrease in prices of other unprocessed food and processed food excluding fruits and vegetables in October pulled food inflation down. On the other hand the energy group incurred inflation of over 4.8 percent, an increase over last year.
Economists say that the annual rate of increase in food prices has fallen to 7.8 percent and the inflation report fell below the new food price assumption (10 percent).
They underline that the seasonal increase in clothing prices was lower than last year's increase with 11.7 percent and thus the annual CPI decreased to 8.55 percent.
On the other hand, according to experts, the Central Bank can close the year with a final discount and stand by. As a matter of fact, the Governor of the Central Bank stated the following in presentation of the inflation report; “I would like to emphasize that we will shape the timing and extent of additional steps according to the data flow and developments in the inflation outlook”.
The bottom line is “outlook for crude oil and other commodity prices, exchange rate movements and public price / tax adjustments” will determine the direction of risks on inflation, in addition to the uncertainty and volatility of food prices, in the upcoming period.
Commenting on the subject Mr. Tolga Ertukel founder of Turkey Homes draws attention to the point that “stronger signs of economic growth equals to further consumer confidence”. He says “We as a leading real estate company, marketing property for sale in Turkey have already been receiving positive outcome on Turkish Citizenship by Investment ruling and this positive news on economic report is certainly an enhancing incentive for foreign visitors”.