Inflation in Turkey steadily trends up

Business Materials 28 January 2012 12:26 (UTC +04:00)

Azerbaijan, Baku, Jan. 28 / Trend S.Isayev/

While headline inflation has been volatile in Turkey, core inflation is steadily trending up, new 2012 International Monetary Fund report said.

The trend primarily reflects pass-through of the cumulative 30 percent nominal depreciation (compared to an equally-weighted euro-dollar basket) since November 2010.

Moreover, such factors as tight domestic supply conditions - with declining unemployment, strong labor cost growth, and rising capacity utilization also contributed.

Producer price inflation has rapidly increased on rising world commodity prices and the weakening lira, and temporarily decoupled from consumer price inflation, which has a more weak and more-delayed exchange rate pass through, and because administered retail prices for electricity and natural gas were held constant during October 2009 and September 2011.