The inflation forecast for the remaining portion of the current year was revealed at a press meeting held by chief Erdem Başçı.
It is now public that CBRT has revised its year end target due to several factors very influential on the findings.
The report revealed that consumer prices had gone up by 1.03 percent in September and inflation had climbed to 9.19 percent. The report added this had been due to the energy and unprocessed food prices. Central Bank also said that core inflation indicators had remained on a favorable track. It was also emphasized that the effects of the hikes in administered prices and tax adjustments had been partially seen in September, and the major part would be evident in October.
The report also said that the bank monitored fiscal policy developments closely while formulating monetary policy adding it was assumed that fiscal discipline would be sustained and there would not be any unanticipated hikes in administered prices.
It went on to say a revision in the monetary policy stance could be considered, in case of a significant deviation of the fiscal stance from the framework and a consequent adverse effect on the medium-term inflation outlook.
According to the report issued by the bank below findings played a role in revised target;
24.10.2012
Editor, BTT
Parts from the inflation report annpunced by CBRT
Inflation Developments
1. In September, consumer prices were up by 1.03 percent and annual inflation climbed to 9.19 percent mainly owing to energy and unprocessed food prices. Core inflation indicators remained on a favorable track. Effects of the hikes in administered prices and tax adjustments were partially seen in September, whereas, the greater part thereof will be evident in October.
2. On the food and non-alcoholic beverages front, annual inflation went up to 10.39 percent. Despite pacing down, seasonally adjusted unprocessed food prices continued to rise in September, pushing the group’s annual inflation upwards.
However, leading indicators point out that in October annual unprocessed food inflation will plummet due to vegetable prices. As for the processed food group, bread and cereals group prices registered increases, and the rise in wheat prices also reflected on other cereals excluding bread as well. Owing to the base effect, annual processed food inflation continued to taper off in this period; while leading indicators suggest that the trend of high-rated monthly increase in processed food prices may continue in October as well.
3. Energy prices went up by 2.43 percent in September parallel to the rise in fuel and bottled gas prices, which was due to soaring oil prices. This upsurge was also attributed to the raised amount of lump sum special consumption tax on fueloil. However, as the tax arrangement was enforced on September 22, the greater part of the mentioned effect on inflation will be seen in October inflation. Energy prices will soar in October due to the adjustment in natural gas and electricity tariffs as well. These hikes and tax arrangements are projected to have a direct effect of 0.8 percentage points on annual inflation in October.
4. On the services front, annual inflation has been flat since May. Annual inflation increased in restaurant-hotel and communication services, yet declined in transport services and rents in September. Upon the arrangement introduced to university tuition rates, prices of education services posted a monthly decline by 1.19 percent in this period. In September, the diffusion index of the prices of services edged up; however the underlying trend of seasonally-adjusted prices remained on a mild track.
5. Annual inflation in core goods group fell by 1 percentage point in September. Annual inflation in all core goods excluding the clothing group recorded decreases. The decline particularly in durable goods inflation is worth noting.
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