Inflation rate reaches 21.3 pct in November
Headline inflation rate in Turkey hit a three-year high of 21.3 percent on an annual basis in November, the Turkish Statistical Institute (TÜİK) announced on Dec. 3.
The consumer price index (CPI) rose 3.5 percent from the previous month, it said in a statement.
The producer price index rose 9.9 percent from a month earlier and 54.6 percent on the year.
The inflation rate reached 19.89 percent in October, while the twelve-month moving average was recorded 17.7 percent in November.
The highest price increase on a yearly basis was seen in hotels, cafes, and restaurants with 28.90 percent last month, reflecting a surge in demand.
The monthly price rise was driven in part by a more than 6 percent jump in transportation costs, reflecting rising global energy prices.
On Oct. 28, Turkey’s Central Bank raised its year-end inflation forecast to 18.4 percent for 2021, up from 14.1 percent in its previous report. The revision was mainly driven by higher import costs and food prices.
The country will see the cumulative effects of its current monetary policy in the first half of the next year, Central Bank Governor Şahap Kavcıoğlu said on Dec. 2, adding that the soaring inflation will ease soon.
“When the rising commodity prices and the factors originating from the supply chain disappear, inflation will decrease,” Kavcıoğlu told local investors, adding the growth rate of commercial loans is 8 percent annually, below the averages of the previous years.
He also said that the Central Bank had “limited space left for an interest rate cut.”
The Central Bank’s medium-term target for headline inflation rate is 5 percent and it says the pressure is temporary and necessary to expand credit, exports and economic growth.
The bank has lowered its benchmark interest rate by 4 percentage points since September in a bid to stimulate lending and exports-driven growth.
The Turkish economy expanded 7.4 percent year on year in the third quarter, meeting expectations on the strength of retail demand, manufacturing and exports, official data showed this week.
Many analysts say that the Turkish economy could expand around 10 percent overall this year.
According to the International Monetary Fund, the global economy is projected to grow 5.9 percent in 2021 and 4.9 percent next year.
The OECD area economy grew 4.7 percent year on year in the third quarter of 2021.
Turkish exports reached an all-time high with $21.5 billion in November, up 33.4 percent year on year. Turkish exports hit $221 billion in the last 12 months, while the figure reached $203.1 billion in the first 11 months of this year.
Turkey’s foreign trade deficit decreased by 13.6 percent in the January-November period compared to the same period last year and decreased to $39.2 billion. The effect of energy imports was seen in both imports and foreign trade deficit in November.
The new economic model that Turkey is pursuing aims to grow the national economy by boosting investment, employment, production and exports, President Recep Tayyip Erdoğan said on Dec. 1