Gas price hikes expected to increase Turkish inflation 0.15 pct in Aug
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Natural gas price hikes would add 0.15 percent to Turkey's inflation in August, the central bank said on Tuesday. Turkey increased gas prices by 16.88 percent for residents and by 18.77 percent for industry as of August 1.
The consumer price index (CPI) rose 0.58 percent, and the producer price index (PPI) climbed 1.25 percent in July according to the figures released on Monday, taking the annual CPI to 12.06 percent and PPI to 18.41 percent.
The Turkish Central Bank said in its July inflation report that the base effect of hikes in food and energy prices had contributed to the spike in the annual inflation.
The hike in electricity prices in June has added 0.5 percent to July's inflation, the report said. Electricity prices for industry were raised by 22 percent effective from July.
The central bank also said the basic inflation indicators were observed as revealing a limited slowing trend for the last two months.
The central bank said the underlying inflation gauges are in a limited but declining trend in the last two months. "Inflation is expected to enter a gradual decline trend in the coming periods if oil prices continue to trade at levels that are better than the expectations in the base case scenario in the July Inflation Report."
The bank had revised up its oil price estimate to $140 per barrel from $105. Crude oil prices have fell to $120, almost 18 percent down from its record high hit in July.
The Turkish Central Bank expects the 2008 year-end inflation rate to reach 10.6 percent, while also estimating it to be down to between 5.9 and 9.3 percent in 2009, and to drop to a level of between 4 and 7.8 percent at the end of 2010.