Istanbul, the largest Turkish city and its most prominent trade center, witnessed a sharp increase in the consumer price index by 5.16% on a monthly basis in January, according to a report issued by the Istanbul Chamber of Commerce.
The index also increased by 48.4% on an annual basis, indicating the continued high inflation in the Turkish economy despite the strict monetary policies followed by the central bank.
Warnings of escalating inflation
A report of the Bloomberg Agency indicated that this increase in prices may reflect a similar rise in the National inflation index, which is scheduled to be announced by the Turkish Statistics Authority on February 3. Economists whose Bloomberg has signed opinions will expect that the monthly inflation rate in Turkey will increase by 4.3% in January, compared to 1.03% in December.
On an annual basis, inflation is expected to slow to 41% compared to 44.4% in December, but the high numbers in Istanbul raises fears of the possibility that estimates be lower than reality.
Wholesale prices
On the other hand, the Istanbul Chamber of Commerce announced that wholesale prices in the city increased by 2.83% on a monthly basis and 38.15% on an annual basis, indicating that inflationary pressures are gradually transferred to the final consumer.
In a new step, the Chamber made adjustments to the contents of the commodity basket and its weights in the retail price index, which is now known as the consumer price index in Istanbul, while the wholesale price index has not been changed.
Economists confirm that these numbers reflect continuous inflationary pressures in the Turkish economy, despite the central bank attempts to raise interest rates to reduce inflation. Analysts believe that the continued high energy and food prices and the low value of the Turkish lira are major factors that drive prices to rise.
An economist in Istanbul, in his interview with Bloomberg, warned that “these numbers may push the central bank to review its monetary policy again, and possibly make additional decisions to tighten credit and reduce consumer spending.”
Consumers and companies’ concerns and companies
For consumers, high inflation means continued erosion of purchasing power and increased living burdens. One of the shoppers in the Eminono Commercial Zone in Istanbul told Reuters that “prices rise almost daily, which makes it difficult for medium income families to cover their basic needs,” Istanbul’s shopping in Eminono commercials in Istanbul told Reuters.
As for companies, the rise in wholesale prices means increasing production costs, which may cause some factories and merchants to raise the prices of final products, which deepens the inflationary crisis.
As the Turkish Statistics Authority announces the national inflation data, economists and investors are waiting for these numbers with caution, in light of indications that inflationary pressures are still high, despite expectations with a slight slowdown at the annual level.
