The Turkish Statistical Institute (TurkStat) announced the inflation figures for August. According to TurkStat, the Consumer Price Index (CPI) increased by 2.47 percent monthly, while annual inflation decreased by approximately 10 points to 51.97 percent.
According to independent research organization ENAG, inflation increased by 3.47 percent in August, while the increase in the last 12 months of the E-CPI was 90.35 percent.
Economists surveyed by Reuters news agency expected the CPI to increase by 2.64 percent monthly in August following the increase in natural gas prices used in homes, and to continue to decline annually with the contribution of the base effect and to be realized at 52.2 percent.
Vice President Cevdet Yılmaz said, “We will begin to see the effects of the positive results we have achieved regarding inflation on the welfare level and income distribution in the coming period.”
Treasury and Finance Minister Mehmet Şimşek also made an assessment of the inflation data in a post he shared on his social media account.
Drawing attention to the change in annual inflation and monthly food prices, Şimşek said, “Disinflation is becoming more evident. Annual inflation decreased by 23.5 points in the last 3 months and reached 52 percent.”
What do economists say?
Speaking to BBC Turkish , economist Hayri Kozanoğlu said that despite the 10 percent decrease in TÜİK inflation, the desired momentum in inflation could not be achieved.
Kozanoğlu said, “I think the base effect story in inflation has come to an end,” and added:
“Once the June and July increases are taken into account, there is a significant decline in headline inflation. But this does not mean that the disinflation program is on track.”
Kozanoğlu stated that he calculated that inflation would be 48.7 percent by the end of the year, and that even if there was a decrease, he thought that inflation would close the year above 30 percent at the current pace.
Kozanoğlu particularly drew attention to the increases in housing and education and continued his words as follows: “Low-income, retired, and military wage earners are particularly constrained in terms of essential needs such as shelter, housing, and transportation. Price increases in these have always been above headline inflation… As a result, low-income people cannot benefit from other opportunities in life such as education, culture, and tourism.”
Başkent University International Finance and Banking Department Head Professor Doctor Şenol Babuşçu drew attention to the difference between the inflation calculations of TÜİK, ENAG and İTO .
Babuşçu said in his X post, “The difference between inflation calculations reached 38.38 percent annually.”
In another post, he emphasized that August 2024 inflation is 0.95 percent above the August average of the last 61 years .
ENAG Director Professor Veysel Ulusoy said in his post, “Prices increased, inflation decreased. We did it . ”
Financial Markets manager Iris Cibre drew attention to the increase in housing and education inflation. “It would be good if someone took action on this school business. The price increases for private schools are exorbitant and I am sure that teachers are not benefiting from these increases.”
Economist Mustafa Sönmez also highlighted the annual increase in the cost of education, housing and eating out, calling the increase in education “an example of helplessness.”
Year-end forecasts
Former Central Bank of the Republic of Turkey (CBRT) Chief Economist and Bilkent University Department of Economics Faculty Member Prof. Dr. Hakan Kara, in his post on X, drew attention to the fact that it has become difficult for the CBRT to reach its year-end inflation target .
“In order to reach the 38 percent target at the end of the year, inflation needs to be 1.3 percent on average in the remaining four months,” Kara said.
Economist Tunç Şatıroğlu also quoted Kara’s post and emphasized that he thought the government’s inflation forecasts would not come true .
Şatıroğlu said that the new Medium Term Program (MTP)’s end-2024 inflation forecast will be 38 percent, and that he does not expect this to come true.
According to a survey conducted by Reuters news agency with the participation of nine economists, inflation is expected to be 42.95 percent by the end of 2024. The forecast range in the survey varies between 40 percent and 45 percent.
In his presentation of the inflation report, Central Bank of the Republic of Turkey (CBRT) Governor Fatih Karahan said that consumer inflation temporarily increased monthly in July and that the convergence of inflation expectations to the forecast range was of critical importance in terms of disinflation.