When the inflation rates in Istanbul turned out to be higher than 6%, I have felt suspicious about the fact that the CPI figures were in line with these rates. As I have frequently said in my previous articles, with the monthly inflation rates to be announced between 1.50-2.00% as of July, the MTP target of 65% and even the Central Bank’s projection of 60.4% could become a reality. But this time, predictions failed since we saw serious price increases in September.
However, the difference between the data provided by Istanbul Chamber of Commerce (ICC) and TurkStat is getting more and more preposterous every day.
Of course, when I said that, I also added that TurkStat would sum up price determinations in a way that could result in relatively low rates. I do not think that the figure has been interfered with, but changes were certainly made. Considering the TurkStat departments with the greatest number of resignations, my convictions have been justified in this regard.
The resulting figure did not surprise me, but it made me think. We are talking about an unprecedented divergence in inflation data released by both ICC and TurkStat. In Istanbul, the items whose prices have increased in September according to ICC indices have been as follows: 53.23% in other expenditures, 9.66% in culture, education and entertainment spending, 9.54% in household goods spending, 8.63% in clothing spending, 8.37% in healthcare and personal care spending, 6.43% in housing spending, and 3.64% in food spending. These figures show us how fast the price increases in September accelerated the cost of living.
Besides, TurkStat data confirms these increases in Istanbul. As far as the main expenditure groups go, we could see that the highest annual increase has been in the transportation group with 117.66%, followed by 93.05% in food and non-alcoholic beverages, 89.68% in household goods group. The highest increase in monthly change was in housing with 9.99%, education with 6.99%, and communication with 3.40%.
Meanwhile, there has been an increase in core inflation announced by TurkStat. In the following months, that is, in October, November and December, very low inflation figures should be announced so that the target can be met.
“Correct Data is the Honour of a Country…”
Since I live in Istanbul, I can directly observe these price increases and I visit at least two cities a month for a conference where I see people are complaining about price increases there as well, and even I witness this fact by collecting information about the price increases in wholesale and retail products. I must say that the CPI rate announced by TurkStat in September is quite away from the realities of Turkey.
Let me give you an example: From construction costs to many services, prices have changed at least four times throughout this year. I know that shopkeepers apologise to their customers when issuing invoices and sadly they pay more for energy than rent. Like us, they pay house rent, send their children to school, and they have business expenses. Their worries and fears about high costs of living disrupt their pricing behaviour. It is impossible to that a positive result could stem from a such hopeless situation, a situation in which so many people are terribly concerned about the future, but TurkStat somehow manages to create a positive vibe about all of this.
I have always said it and I will always continue to say it: Numbers are the honour of a state. They should be accurate no matter what. Providing suspicious data would never bring positive results. I was not surprised by the latest inflation figure, but it was interesting that it was half as much as the figure released by the ICC.