Day in day out, we are being bombarded by news. We can’t help but to get depressed as we see more and more people are getting infected with the virus, and some of them eventually die.
Inflation rates were released in Turkey on last Friday. The coronavirus news didn’t obviously let us give our full attention to the inflation rate announcement. As you may remember, two weeks ago I said:
“…I don’t expect prices to increase so drastically that they will cause people to suffer financially. So, in my estimation, inflation in March would be around 0.7% or less. As for the year-end inflation, I don’t think it will hit single-digits yet. Besides, expectations were all shaped around 10% even before the coronavirus attack. Therefore, I can easily say that inflation will not hit 8.2% as expected by CBRT. But, I don’t expect it to go off the rails either, at least now when we are still dealing with the coronavirus.”
And it turns out that I was right: March inflation (0.57%) wasn’t so surprising to me. But, I must say that I didn’t quite understand what some people meant by “Inflation rate turned out to be higher than expected”.
I was also expecting that the annual inflation rate would fall below 11.86%. Besides, you can have a ballpark figure for inflation rate when you correctly insert the numbers in an EXCEL sheet. So, as a matter of fact, there’s nothing surprising about this. No one can have a spot-on estimate as most of the businesses are closed own right down.
The price of some staple foods has most increased in March, such as long green pepper, banana pepper, potatoes, lemon, and garlic. Apparently, people buy these foods because they think they can be helpful in boosting their immune system to fight the coronavirus. When we take a closer look at the CPI, we can see that there has been an increase in price of a total of 288 goods and services while 98 of them have declined.
“Don’t make it easy for opportunists…”
These figures indicate that the inflationist pressure will not technically reveal itself until the final quarter of the year. However, the recent slowdown in the rate of increase of the general level of prices will not affect taxpayers too much in an environment where many people are being laid off.
Because that 417 goods and services in the CPI are not only things that make us move on with our lives. There are mainly 25 items we tend to buy when we go do shopping. And price increases in those items bring direct negative impacts on our daily lives. So, although I do not currently see any inflationist pressure on the economy, I honestly don’t expect a substantial improvement in high cost of living due to the present circumstances.
I’m sure we can get through this process without suffering too much harm if our government takes the necessary measures to prevent stockers and opportunist thieves from taking advantage of the situation.
