Turkish inflation edges down; producer prices jump
Turkey’s annual consumer price inflation rate edged down to 10.26 percent from 10.35 percent in January, slowing less than analysts expected. Producer prices jumped.
Clothing and footwear prices fell a monthly 4.1 percent, the only sub-index to show a decline. The price of health services rose 2.6 percent from a month earlier and the cost of food and non-alcoholic beverages increased 2.2 percent.
“Disappointing number - there was hope that favourable base period effects would take the headline number into single digits,” Tim Ash, senior emerging markets strategist at BlueBay Asset Management in London, said in an e-mailed note.
Consumer price inflation in Turkey is almost three times the emerging market average of 3.5 percent. The central bank has a target to reduce CPI to 5 percent, but President Recep Tayyip Erdogan’s government has resisted calls for an increase in interest rates that would tame price increases, claiming that higher borrowing costs stoke inflation..
Producer price inflation accelerated to 13.7 percent annually from 12.1 percent, as the price of electricity and gas surged 21.1 percent on a monthly basis. Core inflation was 11.9 percent compared with market estimates of 11.8 percent.