According to the February inflation data announced by the Turkish Statistical Institute (TUIK), annual inflation decreased to 55.18 percent. According to the ‘Monthly Price Developments Report’ prepared by the Central Bank of the Republic of Turkey (CBRT), the biggest contribution to this decrease in inflation came from energy with 5.02 points.

Evaluating this situation, the most enchanting founder and savings expert Çağada Kırmızı said, “We expect a decrease in March inflation again due to the further decrease in market electricity prices.” said.

Turkish Statistical Institute (TUIK), which shares inflation data with the public every month, also announced inflation data for February. TurkStat announced that annual inflation decreased to 55.18 percent in February, while the Consumer Price Index (CPI) increased by 3.15 percent. A remarkable development was seen in the Central Bank of the Republic of Turkey (CBRT) Monthly Price Developments Report after the TUIK’s announcement. According to the report, the biggest contribution to this decrease in inflation came from energy with 5.02 points.

Annual inflation in energy fell to 50.01 percent

According to the CBRT’s Monthly Price Developments Report, annual inflation fell in all sub-groups in February. Contributions of core goods, energy, services, alcohol-tobacco-gold, food and non-alcoholic beverages groups decreased compared to the previous month. Energy prices, on the other hand, maintained their course with an increase of 0.64 percent. Thus, annual inflation in this group decreased by 5.02 points to 50.01 percent.

The decrease in producer electricity prices is at a palpable level

Electricity prices of industrial establishments that affect the production of end consumer products have been excluded from the scope of national tariffs for a long time and are priced on a free market basis. This means that all positive or negative changes in electricity market prices are quickly reflected on the producer electricity prices and indirectly on the final consumer products and the Consumer Price Index. While free market electricity prices broke the historical record with 3.85 TL per kilowatt-hour in September of last year, the Producer Price Index (PPI) peaked at 157 percent and the Consumer Price Index (CPI) 85.5 percent in the following October. It has been observed that there has been a significant relaxation in electricity prices since October 2022. Market electricity prices, which closed 2022 at 3.72 TL per kilowatt-hour, decreased to 2.80 TL in February. The effect of this was reflected in TUIK data and CBRT reports.

Industrial electricity price has both direct and chain effects on inflation.

Cagada Kirim, the most enchanting founder and savings expert, who has been researching the impact of electricity prices on inflation for many years, pointed out the low electricity prices in March and stated that they expect the inflation rate to be announced in April to be significantly lower due to low industrial electricity prices. Crimea continued:

“Currently, electricity prices in March are 25-30 percent lower compared to February. We expect this situation to continue at this level throughout the month and the average electricity price in March to be lower than in February. The extent to which industrial electricity prices, which we always emphasize, affect inflation, was also reflected in both the TURKSTAT and CBRT reports. The price of industrial electricity has both a direct and a chain effect on inflation. That’s why we always emphasize that it would be much better for the economy if industrial electricity was cheaper than domestic electricity. As a matter of fact, although there was no change in home electricity prices, the decrease in inflation became visible. The main reason for this is falling industrial electricity prices. We expect a decrease in March inflation again due to the further decrease in market electricity prices.”

Source: (BYZHA) – Beyaz News Agency