Turkish inflation rises above expectations

After falling below 7 percent in July, Turkey’s consumer price index rises to 7.14 percent in August, as Turkish lira weakens due to global financial turmoil and strengthening dollar

Photo by: AP
Photo by: AP

A customer pinches the fresh peaches at a central market place, July 14, 2015

Inflation in Turkey increased in August after falling for two consecutive months, official statistics revealed on Thursday.

The annual inflation rate rose to 7.14 percent in August from 6.81 percent in the previous month, the Turkish Statistical Institute said. The Consumer Price Index saw a 0.40 percentage point increase in August from July.

“When new data was examined, we saw that both monthly data at 0.4 percent and annual at 7.14 percent were over the forecast at 0.1 percent and 6.8 percent, respectively,” economist Eren Can Umut from Meksa Securities said.

“Since the recent sharp depreciation in Turkish lira increases the cost of production, it is normal to see a surge in prices,” Umut said.

In August, the highest monthly increase was 2.05 percent in hotels, cafes and restaurants, while the largest monthly decline was 4.32 percent in clothing and footwear, according to the report. The highest annual increase was 14.26 percent for hotels, cafes and restaurants, the report added.