Inflation, food prices

Prices in Turkey grew by over 15% in February

Inflation soared due to the increase in the costs of furniture and household equipment, transportation and food.

Prices in Turkey grew above expectations last February, in which inflation grew by 15.61% compared to the same month last year, which is the highest inflation figure in almost 2 years : figures that further increase the pressure on the Turkish Central Bank (TCMB) to maintain one of the strictest monetary policies in the world in order to contain price escalation.

Month by month, the rise in the CPI was 0.91% compared to January 2021, according to the report published today by the Turkish Statistical Institute (TÜİK), highlighting the increase in the cost of health and food (3% and 2.57%, respectively). At year-on-year level, the highest price increases were in furniture and home equipment (23.74%), followed by transport (22%) and food (18.4%), while the lowest increase was registered in alcohol and tobacco category (2.87%).

Inflation in Turkey has remained at very high levels – above 10% – for practically the last 4 years; in January it skyrocketed to almost 15% (14.97%), and in the last months of 2020 it has remained at very high levels despite efforts by the Central Bank of Turkey.

The data published today by TÜİK is in fact higher than expected by economists; an estimated average of 16 experts consulted by Reuters had predicted that inflation in Turkey would reach 15.39% in February; 21 economists consulted by Bloomberg estimated a 15.4% increase in prices, while a similar survey carried out by the Turkish news agency Anatolia had yielded a forecast of 15.45%.

The Turkish government has set an inflation target of 8% for 2021, while the Central Bank’s forecast is 9.4%. According to data released by the Istanbul Chamber of Commerce, prices in Turkey’s largest city increased by 15.5% in February compared to the same month the previous year, after having increased by 15.1% in January; again, food was one of the main causes of the rising cost of living in Istanbul.