Deputy PM Şimşek refutes reports about revision in inflation basket

ANKARA

There will be no change in the inflation basket in Turkey, Deputy Prime Minister Mehmet Şimşek has said, rejecting earlier reports about a potential decrease in the share of food prices, even though the economy minister finds the share of food prices quite high. 

“The shares in the Turkish Statistics Institute’s consumer price index inflation basket are set in accordance with the results of household surveys. There will not be any intervention,” Şimşek tweeted on Oct. 18. 

It had been reported on Oct. 17 that the share of food prices in the inflation basket would be decreased from 24 to 20 percent by the end of the year in order to ease consumer price increases, following remarks by Economy Minister Nihat Zeybekci. 

Zeybekci said it was against the rules for the Economy Ministry to determine the shares in the basket, but the share of food prices was high in respect to the national income per capita. 

“If the share of food prices in the inflation basket was around 29 percent when the national income per capita was around $3,000, I do not find a 24 percent share in the basket irrational now as the national income per capita has hiked to around $9,000-9,500,” he said in an interview with Anadolu Agency on Oct. 19. 

The government recently restructured its food committee in order to combat stubbornly rising food prices, which have pushed up the inflation rate. 

The committee is headed by Şimşek and is composed of all related ministers. The Central Bank is the secretary of the committee. 

The government recently raised its forecasts for consumer price inflation. It predicts inflation of 7.5 percent at the end of this year and 6.5 percent in 2017, raising the forecast for next year from a previous 6 percent, according to its new medium-term economic program.