Consumer price inflation at 73.5 percent in May

Consumer price inflation at 73.5 percent in May

Consumer price inflation at 73.5 percent in May

Consumer prices in Turkey increased by 2.98 percent in May, slowing from the 7.25 percent month-on-month increase recorded in April, according to data from the Turkish Statistical Institute (TÜİK) on June 3.

Consequently, the annual consumer price inflation accelerated from 69.97 percent in April to 73.5 percent last month, TÜİK said.
Food and non-alcoholic beverage prices rose by 1.63 percent in May from April for an annual increase of 91.6 percent, while transport costs were up 3.43 percent month-on-month and 107.6 percent year-on-year.

The prices of alcoholic beverages and tobacco prices rose by 6.5 percent in May from April and the annual increase for those items was 66.62 percent.

Hotel, case and restaurant prices exhibited a 5.47 percent increase in May, while the year-on-year rise was 76.8 percent.

Housing costs were up 2.25 percent month-on-month and 63.5 percent year-on-year, data showed.

People, who live in rental houses, closely watch the inflation data because when lease agreements are renewed, the rent price hikes should be in line with the 12-month average in rate of change in the consumer price inflation.

TÜİK data showed that the rate of change on the 12-month average was 39.33 percent.

However, in the face of rampant headline inflation, landlords have been asking for much higher rent price increases, which prompted the government to step in to regulate the rent hikes.

Introducing a cap on rent price hikes is being considered, but this would be a temporary measure, Justice Minister Bekir Bozdağ said earlier this week.

When the cap is set, consumer price inflation will be taken into account, but it will be the rate that will be acceptable by both sides (landlords and tenants), Bozdağ said.

Separately, Environment, Urbanization and Climate Change Minister Murat Kurum said that regulations designed to prevent exorbitant increases in rent prices will be submitted to parliament soon.

The authorities recently hiked the prices of electricity and natural gas prices for households as well as industrial users but there were not reflected in the May inflation data.

The Energy Market Regulatory Authority (EPDK) said electricity prices for households and industry were increased by 15 percent and 25 percent, respectively, with new tariffs taking effect as of June 1.

Separately, the state-owned Petroleum Pipeline Corporation (BOTAŞ) announced that it increased natural gas prices for households by 30 percent.

The price of natural gas used in electricity production was hiked by 16.3 percent and by 10.2 percent for gas used in industry.

Producer prices increased by 8.76 percent in May from April with the annual rise accelerating from 121.8 percent to 132.2 percent, TÜİK said.

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