NEWS ECONOMY NEWS        03/02/2021

Turkey’s annual inflation rate moves up to 14.97% in January 2021

The Turkish Statistical Institute (TÜİK - TurkStat) announced an increase in the consumer inflation rate for January 2021 compared with the previous month as 1.68%, resulting in the annual-to-date rate as 14.97%. Market analysts in a poll organised by Anadolu Ajans, the state’s national news agency, had predicted a lower inflation rate of around 14.75%. The annual inflation rate of 14.97% for January 2021 compares with 12.15% for January 2020.

 

The highest monthly increase was recorded in health with 4.25%, followed by housing with 3.02%, household goods with 2.90%, food and non-alcoholic beverages with 2.48%, miscellaneous goods and services with 1.94%, and restaurants and hotels with 1.56%. Monthly increases were also recorded in entertainment and culture with 1.23%, transportation with 1.12%, alcoholic beverages and tobacco with 0.67%, and communications with 0.31%. Monthly decreases were recorded in clothing and footwear with 4.37%, followed by education with 0.03%.

 

The highest annual increase was recorded in miscellaneous goods and services with 24.53%, followed by household goods with 23.25%, transportation with 21.43%, food and non-alcoholic beverages with 18.11%, health with 16.99%, restaurants and hotels with 12.89%, and housing with 11.56%. Annual increases were also shown in entertainment and culture with 9.75%, communications with 6.32%, education with 6.13%, clothing and footwear with 2.12%, and alcoholic beverages and tobacco with 1.35%.

 

There is much speculation as to the accurateness of the inflation figures produced by TurkStat as ordinary citizens understandably feel that they have experienced a much higher rise in the cost of living over the last year. The Turkish Central Bank revised its inflation rate forecast for 2021 to 9.4% on 28.10.2020. The new economic team which took over in early November 2020, decided in its 2020-IV Inflation Report of January 28th, 2021 to keep the inflation forecast for 2021 unchanged at 9.4%. The January 2021 inflation rate of 14.97% is now 2.03 percentage points below the Bank’s policy interest rate of 17%. With its new economic team, the Turkish government has indicated that it is prepared to introduce a tighter monetary policy to stabilise prices. It has yet to be seen whether the government’s new approach will result in a more credible inflation rate being put forward.



Turkey’s net minimum wage has been raised 21.56% to TL 2,825.90 (USD 380) as of 01.01.2021       Migration communication helpline 157 available for foreigners in Turkey       Read our homepage articles on developments in the Turkish economy       Turkey’s official annual inflation rate increases to 16.19% in March 2021       Turkey’s official unemployment rate jumps to 13.4% in February 2021       Read our BUSINESS section for latest sectoral and corporate news       Turkey’s population is 83,614,362 as of 2020 yearend       Foreigners visiting Turkey in 2020 falls by 71.7% to 12.7 million       Turkey’s private sector foreign debt is USD 173.9 billion as of 2020 yearend       Turkey’s economy grew by 1.8% in 2020       Foreign Direct Investment inflow to Turkey was USD 7.7 billion in 2020