| |
|
 |
Turkey´s annualized inflation of consumer prices increased to 9.48 percent in November from 7.66 percent a month before, inching closer to a double-digit mark by the end of this year, data released by the Turkish Statistics Institute (TurkStat) on Monday have shown.
|
TurkStat announced on Monday that consumer prices jumped by 1.73 percent and producer prices by 0.65 percent in November over the preceding month. The central bank had expected annualized inflation for November to increase by 1.27 percent over the preceding month. The report revealed that annualized inflation as of November was 9.48 percent in consumer prices and 13.67 percent in producer prices. Having realized the inflation target was too optimistic, the central bank had revised its year-end inflation forecast from 6.9 percent to 8.3 percent. The bank's survey of expectations in the second half of November put this figure higher, at 9.2 percent. November's data show that year-end inflation will likely exceed the latest revisions.
Having remained below a level of 5 percent in the first quarter of this year, Turkey's inflation entered a speedy rising trend starting in the second quarter. November data shows inflation has now reached its highest level since April 2010, when it was 10.19 percent. Similar to its assessment last month, TurkStat cited the base effects on prices of processed food items and the weakening of the Turkish lira as the major factors behind the surging inflation. The base effect from hikes in the private consumption tax (ÖTV) on certain products in October along with soaring prices for crude oil in global markets are also responsible for November's high figures. On Oct. 13, the government raised the ÖTV on cars and mobile phones as well as on tobacco and alcohol products.
Evaluating the results, the majority of economists say double-digit inflation is now almost certain by year-end.
Bahçeşehir University's Center for Economic and Social Research (BETAM) director Seyfettin Gürsel says the current figures indicate year-end inflation in consumer prices will exceed 10 percent, while the base effects from soaring commodity prices maintain their pressure. “I could say we are almost certain to see the double-digit mark.” Gürsel said, adding that inflation will continue to rise further to hover around 10-11 percent in the first months of 2012. With regards to a possible increase in interest rates in face of inflationary pressure, the BETAM director said the rates could see an increase through the end of the year. Making mention of the central bank's 2012 year-end inflation target of 5.5 percent, he said: “We cannot be as optimistic as the central bank. … The year-end inflation for next year will be higher than this [targeted] figure.”
İstanbul Commerce University's Kerem Alkin said inflation will continue to rise in the following months amid potential external shocks. “Problems in foreign markets, particularly the EU, will be a factor defining the future course of inflation in Turkey,” he opined. An ongoing uncertainty due to the sovereign debt crisis in the EU -- Turkey's largest trade partner -- could affect Turkish markets negatively unless a solution is brought in the short term, Alkin noted. Markets have turned their eyes to a summit of EU heads of state in Brussels on Dec. 9 and expect the meeting to produce a cure for the “sick eurozone.”
Some, however, argue the summit will fail to offer a permanent solution. Recalling that observers expect a slowdown in world economic growth in the first half of 2012, Alkin said the government could tend to increase taxes to back up this economic growth to some extent. “If this happens and food prices continue to rise at the same time, inflationary pressure will be greater than anticipated.” As for the central bank's reaction to “untamed” inflation, Alkin said the bank will try to respond by maintaining its strict monetary policy and that the government should extend support to the bank in this regard. The central bank earlier signaled it will continue to implement sharp measures to rein in the country's rising inflation.
Speaking to Today's Zaman via telephone, Selim Işıklar, a strategist at Info Investment, joins Gürsel and Alkin in saying the year-end inflation rate will reach double digits. Işıklar cites an increase in crude oil prices as the major factor behind the worsening inflation. Amid speculation of problems with delivery from Iran -- the world's third-largest oil supplier -- crude oil, which was $89 at the end of January, was priced just below $102 in markets on Monday. Observers warn rising oil prices could also harm growth and account balances in such countries as Turkey, which is dependent on foreign crude oil sources.
Işıklar said the increase in producer prices is particularly worrisome and that this could lead to an increase in cost inflation. Asked whether the government could opt to increase indirect taxes -- taxes that are not directly paid by an individual to the government such as the value-added tax (KDV) -- Işıklar said the government gives priority to economic growth and that it is not that easy to reduce inflation and keep economic growth high at the same time.
Double digits less likely for 2012 year-end
Despite a pessimistic outlook regarding 2012 expectations, some maintain hopes that inflation will ease through to the end of next year thanks to strict measures by the central bank.
As a result of the monetary tightening it enacted in October, the bank earlier said that “secondary impacts of temporary price movements will remain limited.”
Garanti Yatırım economist Gizem Öztok Altınsaç said they expect Turkey's annual inflation to hover around 9-9.5 percent until the final quarter of 2012 and that it will decline to 6.5 percent in the final two months. She said 2012 will be a tough year for both the central bank and the government, as external shocks will threaten markets more than they did in 2011.
ING economist Ömer Zeybek says he expects prices will “balance,” starting from the beginning of 2012 as the base effects of October's ÖTV hikes are eliminated. Underlining that price increases in the ready-to-wear industry made the second-highest contribution to November inflation, he said this sector experienced temporary increases due to seasonal effects that will ease starting in December. “The central bank introduced strict monetary policy at the beginning of October to minimize the negative impacts on inflation of tax hikes and the weak Turkish lira. We think that these measures will help slow down the increase in inflation,” he opined.
Observers argue one critical fact is that core inflation (excluding energy, unprocessed food, alcoholic beverages, tobacco and gold -- some of the major factors behind high inflation) was 8.18 percent in November, the highest level since July 2007. Core inflation was around 2.5 percent in November 2010 and has more than tripled since.
|
Source : todayszaman.com
Hit : 610
|
|
|
|
