Emphasis on red meat in the Central Bank’s inflation report

The Central Bank (CBRT) published its Monthly Price Development Report for April.

In the report, it was noted that food prices rose more than the historical trend, led by red meat and processed meat products.

After the Turkish Statistical Institute (TUIK) announced that the Consumer Price Index (CPI) increased by 2.39 percent in April and annual inflation fell to 43.68 percent, the Report of CBRT Price Development.

According to the report, annual inflation fell across all subgroups in April. The most obvious contribution to this decline came from food and non-alcoholic beverages with a score of 2.91.

In the course of monthly inflation, the food and services groups stood out as in the previous month, while energy prices fell significantly. Food prices increased above the historical trend for April, led mainly by red and white meat and processed meat products.

In the services group, monthly price increases were observed in all subgroups, while the group’s downward effect on annual consumer inflation was 0.57 points. The prices of the energy group also decreased significantly, reflecting the favorable movements of external prices.

In April, producer prices increased at a limited pace supported by the ongoing downward trend in energy prices, while the annual rate of increase in domestic producer prices decreased by 10.34 points to 55.11 percent.

Under this perspective, the monthly increase rate of the seasonally adjusted data slowed down in indicator B, while it increased slightly in indicator C. The annual inflation of indicators fell to 48.02% and 45.48%, respectively.

Price increases strengthened in the services sector, which is one of the groups that make up the B index, while they maintained their moderate course in basic goods and weakened in the group of processed foods.

Compared to the previous month, the contributions of the food and non-alcoholic beverages, energy, basic goods, services and alcohol-tobacco-gold groups decreased 2.91, 2.15, 0.92, 0.57 and 0.28 points, respectively.

PRICES OF SERVICES INCREASED IN APRIL

Services prices rose 3.89 percent in April, while the group’s annual inflation fell 1.31 points to 58.62 percent.

In this period, annual inflation fell in the transport and restaurant-hotel subgroups, especially in the transport group, while it remained stable in the other services group and registered an increase in rents and communications.

The monthly price increase in the communication group was at a high rate of 8.02 percent. This development was driven by the increase in mobile phone calls and internet fees.

With the recent outlook in food prices, especially red meat, monthly price increases in the restaurant-hotel group remained high.

While the monthly price increase in transportation services was registered at 3.08 percent due to the increase in interurban passenger transportation by road, annual inflation in this group decreased to 45.44 percent.

While the monthly price increases in the subgroup of other services were extended to the general public, the increase in the prices of tourist packages in this period became evident as of last month. In the rental subgroup, the monthly increase was 4.37 percent and annual inflation rose to 66.76 percent.

PRICE INCREASE IN CARS AND APPLIANCES STRENGTHENS

The annual inflation of basic goods fell 2.42 points to 34.16 percent.

Durable goods prices (excluding gold) increased 3.05 percent on a monthly basis, while annual inflation in the subgroup decreased 2.74 percentage points to 37.47 percent. While price increases strengthened in auto and appliance items in April, they slowed in furniture.

While the monthly increase in the prices of other basic goods weakened 1.09 percent compared to the previous month, annual inflation for this subgroup decreased 1.15 percentage points to 43.33 percent.

Medicines, whose prices increased by 5.36 percent due to the decelerating effect of the regulation that occurred in mid-March on the legal profitability scales, became the outstanding item in the subgroup. The monthly rate of increase in prices in the clothing and footwear group, where the transition to the new season is taking place, followed a moderate course due to the change in method (the change of the month of entry of summer products to the index of April to May).

ENERGY PRICES DECREASED

While energy prices fell 3.86 percent in April, the group’s annual inflation fell 14.47 points to 21.19 percent. While the 15 percent reduction in household electricity prices was the driving factor in this development, developments in fuel and bottled gas prices were other contributors to the monthly decline.

The prices of food and non-alcoholic beverages increased 3.95 percent in April, while annual inflation decreased 13.97 points to 53.92 percent. Annual inflation decreased 13.24 points to 52.70 percent in unprocessed foods, and to 57.75 percent in processed foods with a decrease of 13.93 points.

Seasonally adjusted data points to an increase in fresh fruit and vegetable prices due to vegetable prices in this period. Significant increases in red and white meat prices continued in the unprocessed food group, excluding fresh fruits and vegetables.

Although monthly inflation in processed foods remained subdued, prices for processed meat products continued to increase in parallel with rising meat prices, while rising bread and cereal prices were the lowest recorded in the last 2 years.

Domestic producer prices registered a limited increase of 0.81 percent in April, while annual inflation decreased 10.34 points to 52.11 percent.

Although annual inflation decreased in all subgroups according to the main industry groups, energy prices continued to decline significantly on a monthly basis due to the evolution of industrial natural gas and electricity prices.

When analyzing the evolution of monthly prices by sector, the prices of electricity and gas manufacturing, tobacco products, refined petroleum products and coal decreased, while relatively higher price increases were observed in the sectors of metallic minerals, mining, food, motor vehicles and textiles. (AA)