Turkey’s annual consumer price inflation jumped to 9.58 percent in January, data showed on Wednesday, exceeding forecasts and hitting its highest level since May 2014 on the back of surging food, drinks and tobacco prices.
High inflation is a major concern for policy makers in Ankara and Central Bank Governor Erdem Başçı said last week Turkey would not be able to meet its 5 percent inflation target until the end of 2018.
The consumer price index was up 1.82 percent month-on-month in January, the Turkish Statistics Institute said, exceeding a forecast of a 1.7 percent rise in a Reuters poll. Annual inflation stood at 8.81 percent in December. The data showed the rise in headline inflation was driven by a 4.28 percent increase in food and non-alcoholic drinks’ prices and a 9.6 percent jump for alcoholic drinks and tobacco after price hikes in early January. The lira eased to 2.9607 after the data from an early 2.9582, and 2.9482 late on Tuesday. The main share index Borsa İstanbul (BİST) was flat and the benchmark 10-year government bond yield was also steady at 10.88 percent. Domestic producer prices rose 0.55 percent on the month, for an annual rise of 5.94 percent, the data also showed.
Reports of rising food prices have been appearing in the Turkish media frequently for over a year. Global food prices hit a five-year low in 2015, according to the UN’s Food and Agriculture Organization (FAO), dropping 20 percent on average. This major global drop is not reflected in Turkey, however, where official figures from the Turkish Statistics Institute (TurkStat) indicate that food inflation stood at 10.8 percent last year.