The Turkish Statistical Institute (TÜİK - TurkStat) announced an increase in the consumer inflation rate for August 2020 compared with the previous month as 0.86%, resulting in the annual-to-date rate coming at 11.77%, only marginally above the previous month’s rate of 11.76%. Market analysts had predicted a higher monthly rate increase of close to 1%.
The highest monthly increase was recorded in miscellaneous goods and services with 5.09%, followed by transportation together with restaurants and hotels with 1.56% each, household goods with 1.21%, entertainment and culture with 1.07%, housing with 0.95%, and health with 0.94%. The lowest monthly increase was recorded in alcoholic beverages and tobacco with 0.20%, followed by education with 0.46%, and communications with 0.53%. The highest monthly decrease was recorded in clothing and footwear with 2.11%.
The highest annual increase was recorded in miscellaneous goods and services with 26.99%, followed by health with 14.68%, food and non-alcoholic beverages with 13.51%, transportation with 12.69%, restaurants and hotels with 11.80%, and housing with 11.34%. The lowest annual increases were recorded in alcoholic beverages and tobacco with 2.44%, followed by communications with 6.37% and entertainment and culture with 6.61%.
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 on 29.07.2020 revised its year-end inflation forecast for 2020 up to 8.9% from a previous prediction of 7.4%. The Bank also forecast an inflation rate of 6.2% by the end of 2021. The inflation rate is currently now 3.52 percentage points above the Bank’s policy interest rate of 8.25%.