Experts stated that March inflation figures provided moderate “breathing space” in the short term and that the disinflation conjuncture continued despite the war between the USA/Israel and Iran.
Consumer Price Index (CPI) increased by 1.94 percent on a monthly basis in March, and Domestic Producer Price Index (D-PPI) increased by 2.3 percent. Annual inflation was recorded as 30.87 percent in consumer prices and 28.08 percent in domestic producer prices.
Head of the Department of Economics at TOBB University of Economics and Technology, Prof. Dr. Talha Yalta told the AA correspondent that March inflation came slightly below expectations, indicating a more moderate picture in the price increase rate for this month.
Yalta said, “The fact that the monthly increase was below the expectations at 1.94 percent and the annual inflation fell to 30.87 percent provides a measured breathing space in the short term in the inflation outlook. This should neither be exaggerated nor seen as unimportant. Although a single data cannot give the whole picture, the March figures show a positive picture, at least according to expectations. However, in the coming period, it will be necessary to monitor more clearly the effects that the conflict in the region may have on energy prices, exchange rates and expectations.” he said.
“IT WAS LOW CONTRAST TO MARKET EXPECTATIONS”
Istanbul University Faculty of Economics Lecturer Prof. Dr. Sefer Şener pointed out that the inflation rate in March was very low, contrary to all expectations in the market, and said:
“Inflation that is below expectations will undoubtedly have a positive impact on the markets. In other words, these low figures are perceived as a positive contribution by the financial markets. However, the positive atmosphere is perceived differently for the real sector. Undoubtedly, the indirect effects of the increase in fuel prices will only emerge in the long term. Even though this is the case, the highest impact on inflation still came from the transportation expenditure group. The impact on fuel oil in April, May and June will be more reflected on inflation. In other words, rather than an immediate deterioration in pricing due to the war, this “It seems more likely that pricing will be reflected in the coming months.”
Emphasizing that the direct and indirect effects of the increase in energy prices will be reflected more intensely on inflation in Türkiye in the coming months, as well as globally, Şener said, “Even if inflation falls to very low levels, unless the inflation pressure coming from food, shelter, transportation, education and health decreases, the citizens will not feel the decrease in inflation and, accordingly, their inflation expectations will not decrease very easily.” he said.
“MAIN DISINFLATION PROCESS CONTINUES”
Economist Bora Tamer Yılmaz stated that the disinflation conjuncture continues despite the war and said, “War inflation will have some effect, but the main downward trend will not change. This needs to be understood very well. Due to ‘warflation’, also defined as war inflation, inflation will remain slightly higher than expectations at the end of the year. In other words, it will result in us staying slightly above 20 percent, but the main disinflation process continues. Inflation will sit somewhere between 20 and 25 percent.” made his assessment.
Stating that only the downward trend in inflation will slow down, Yılmaz explained that the effects of the war will come gradually. Yılmaz pointed out that the effects of the war were more visible on processed packaged food, and stated that a more positive course could occur in the prices of fresh vegetables and fruits, and that sowing and planting were done before the shock of the war. Stating that the impact of the developments in the region can be seen mostly in summer season products, Yılmaz said, “The authorities have taken very important proactive measures in critical areas, especially fertilizer. The positive impact of these measures will be reflected in the agricultural sector.” he said.
“PRODUCER PRICES ARE MORE CONTROLLED”
Tuncay İnci, Chairman of the Board of Directors of Spectrum Audit, Consultancy, Certified Public Accountant Inc., stated that when the data is looked at, the effects of the policies implemented in the fight against inflation are beginning to be seen more clearly. İnci said, “While the CPI increased by 1.94 percent monthly in March, it reached 30.87 percent on an annual basis. This rate indicates a significant decline compared to the same period of the previous year and shows that the disinflation process continues.” gave his information.
Likewise, İnci emphasized that there is a more controlled outlook in producer prices and explained that the fact that producer inflation is below consumer inflation indicates that cost pressures may be reflected more limitedly in the coming period, and that this is an important gain in terms of price stability.
Stating that the tightening steps and macroprudential measures implemented, especially monetary policy, continue to be effective in the process of controlling inflation, İnci said, “Continuing these policies with determination in the coming period will ensure that the decline in inflation becomes permanent and will create an important basis in line with the price stability target.” he said.
