Ankara – The Türkiye Cumhuriyet Merkez Bankası (TCMB) has released its February Price Developments Report, stating that the underlying trend of inflation remained broadly flat during the month, while annual inflation increased in the food and alcohol-tobacco-gold groups.
According to the report, consumer prices rose by 2.96% in February, while annual inflation increased by 0.88 percentage points to 31.53%. Annual inflation rose significantly in the food and alcohol-tobacco-gold categories but declined in other main groups.
Food prices were the primary driver of monthly consumer inflation, while price increases excluding food remained limited at 1.66%. In unprocessed food, vegetable and white meat prices stood out, while milk and dairy products were the main contributors within processed food.
The Bank noted that adverse weather conditions and seasonal factors related to Ramadan also had an impact on food prices.
When adjusted for seasonal effects, services inflation increased compared to the previous month, partly due to accelerating communication service prices. Meanwhile, the moderate trend in core goods inflation continued and was observed across subgroups.
Producer prices also remained elevated, rising by 2.43% in February. Annual producer inflation increased by 0.39 percentage points to 27.56%.
Core Goods and Energy Contributions Decline
Despite the increase in headline annual consumer inflation, the annual rate of the B index declined by 0.20 percentage points to 29.91%, while the C index fell by 0.34 percentage points to 29.46%.
Examining contributions to annual inflation, the impact of core goods and energy groups decreased by 0.45 and 0.25 percentage points, respectively. In contrast, the contributions of food and non-alcoholic beverages, services, and alcohol-tobacco-gold groups increased by 1.24, 0.24, and 0.10 percentage points, respectively.
Seasonally adjusted data indicated that the monthly rise in consumer prices remained relatively flat compared to the previous month. Excluding food, consumer inflation slowed.
Monthly price increases rose slightly in the B index but declined in the C index, largely due to notable increases in processed food prices.
Services Inflation Moderates Annually
Service prices increased by 3.19% in February, while annual services inflation fell by 0.56 percentage points to 39.67%.
Annual inflation rose in communication and other services but declined in other subgroups. Communication services stood out with a monthly increase of 8.73%, driven mainly by higher mobile phone call charges.
Financial services prices increased by 11.06%, marking the sharpest rise within the “other services” category, followed by maintenance and repair services at 5%.
Education services prices rose by 3.97% month-on-month, lower than the same period last year. Rent increased by 3.46% in February, while annual rent inflation declined by 2.64 percentage points to 53.91%.
Prices in the restaurants and hotels group increased by 2.82%, despite unfavorable developments in food prices. Transportation services prices remained moderate, supported by seasonal declines in airfares.
Core Goods Prices Decline
Core goods prices fell by 1.00% in February, bringing annual inflation in the group down by 0.88 percentage points to 16.57%.
Durable goods prices (excluding gold) rose moderately by 1.04%. Price increases in furniture (0.47%) and household appliances (0.45%) slowed significantly, while prices for other electrical and non-electrical appliances declined by 1.19%. Automobile prices rose by 2.44%.
Clothing and footwear prices fell by 5.43% due to seasonal factors, while other core goods remained broadly stable.
Energy prices rose by 1.97% in February, though annual energy inflation declined by 2.02 percentage points to 28.19%. Fuel prices increased by 4.52% and bottled gas prices by 5.58%, reflecting developments in international energy markets. However, a 3.74% decline in electricity prices due to adjustments in the last-resort supply tariff (SKTT) helped limit the overall increase.
Food and Non-Alcoholic Beverages Remain Elevated
The food and non-alcoholic beverages group recorded a monthly inflation rate of 6.90%, with annual inflation rising by 4.76 percentage points to 36.45%.
Unprocessed food prices increased by 9.03% month-on-month, mainly driven by vegetables and white meat. In processed food, higher raw milk prices were reflected in dairy products, while rising meat prices impacted processed meat products.
The Bank emphasized that both adverse weather conditions and Ramadan-related seasonal factors contributed to the upward pressure on food prices.
In the alcohol and tobacco group, tobacco prices increased in February due to the delayed effects of January’s tax adjustment, with further impacts expected in March. Alcoholic beverage prices also rose moderately.
Domestic Producer Prices Continue to Rise
Domestic producer prices increased by 2.43% in February, with annual inflation rising to 27.56%.
While energy prices declined by 0.22%, durable consumer goods (4.47%) and non-durable consumer goods (3.30%) recorded notable increases. On a sectoral basis, refined petroleum products, other manufactured goods (driven by precious metal prices), and metal ores posted the strongest price increases.
The Central Bank’s indicators suggest that the underlying trend of inflation remained broadly flat in February, although three-month averages pointed to a limited uptick.
Source: Patronlar Dünyası/ Prepared by: İlayda Gök