Central bank blames global uncertainty for high March inflation
Posted by meb at April 5th, 2008
The Central Bank of Turkey stated yesterday that soaring food and energy prices in world markets had played a part in the higher than expected March inflation figures, also noting that the uncertainty stemming from global turbulence played a key part in deviations from the targets.
In a written statement the bank shared its assessments of the consumer and producer price indices (CPI and PPI, respectively) that were released on Thursday evening by the Turkish Statistics Institute (TurkStat). The bank further noted that the belated effects of developments in the currency market will continue to adversely affect the major inflation indicators. The statement also noted that inflation rates tend to drop as a result of the slowing domestic demand.
The monthly change in the PPI was 3.17 percent in March, and the CPI climbed by 0.96 percent. With these figures, annual inflation surpassed the 10 percent level in PPI after a long period of single-digit figures. The CPI, meanwhile, rose to 9.15 percent.
The basic points outlined in the central bank statement were as follows:
* Despite the partial correction in unprocessed food prices, the significant increases in processed food prices prevented a decline in the inflation of the overall food sector.
* The devaluation of the lira last month had an adverse effect on rates of inflation.
* Contrary to positive developments in rent costs, the rise in prices of catering and transportation services drove service sector inflation higher.
* The risks pertaining to energy prices continued to play a key role in the market. The inflation rate for energy and goods excluding unprocessed foods rose to 6.96 percent.
* The prices of clothing and shoes increased by 1.8 percent in March, whereas they had traditionally fallen in the same month in previous years.
* Gold prices in March climbed by 25.5 percent in the first quarter.
* Prices for durable goods (excluding gold) declined in March by 0.1 percent compared to the previous month.
source: Today’s Zaman
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