The Central Bank announced that inflation has decreased across all subgroups, including rents.

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The Central Bank of the Republic of Turkey (CBRT) reported that the slowdown in the main trend of consumer inflation continues. According to the CBRT's December Price Developments Report, annual inflation decreased across all main groups, particularly in food.

In recent months, strong price increases in fresh fruits and vegetables gave way to a limited decline in December. With the effect of this development, the monthly inflation of the food group significantly slowed down.

While the price increase in the energy group maintained a moderate trend in December, the slowdown in monthly inflation in the services group became more pronounced, with falling transportation services prices standing out within the group.

While the monthly increase in rents weakened, this development was influenced by the seasonal decrease in the contract renewal rate as well as the slowdown in the increase rate of contracts.

"MATERIAL INFLATION REMAINED LOW"

According to the report, core material inflation continued to remain low in December. A slight strengthening in durable goods price increases prevented a more positive outlook in the monthly inflation of the core material group. Accordingly, in the durable goods subgroup, while car prices remained stable, the white goods item attracted attention with a significant price increase in December. The moderate trend in producer prices continued during this period. Under this outlook, the seasonally adjusted monthly increases in the B and C indicators weakened, while the slowdown in the main trend of consumer inflation continued.

In December, consumer prices rose by 1.03%, while annual inflation decreased by 2.71 points to 44.38%. When examined with seasonally adjusted data, it was observed that the monthly increase in consumer prices slowed compared to the previous month. The annual change rate of the B index decreased by 1.74 points to 43.94%, while the annual change rate of the C index decreased by 1.79 points to 45.34%. When examining the contributions to annual consumer inflation, the contributions of food, services, core material, energy, and alcohol-tobacco-gold groups decreased by 1.10, 0.77, 0.44, 0.34, and 0.06 points, respectively, compared to the previous month. With seasonally adjusted data, monthly increases recorded a decrease in the B and C indicators compared to the previous month. According to the report, while price increases in the groups constituting the B index decreased in core material and services, there was a slight increase in processed food. The indicators monitored within the CBRT indicated a decrease in the main trend of inflation in December.

"ANNUAL INFLATION DECREASED IN ALL SUBGROUPS, PARTICULARLY IN RENT"

The annual inflation of the services group decreased by 2.16 points in December, finishing the year at 65.73%. Annual inflation decreased in all subgroups, particularly in rent. The slowdown in monthly price increases in the services group, which occurred in the previous two months, continued to become more pronounced at 1.05% during this period.

On a monthly basis, the inflation of the rent group decreased to 2.89% due to the seasonal decline in the contract renewal rate as well as the slowdown in the increase rate of contracts, thus recording the lowest monthly increase rate since February 2023.

According to the report, monthly inflation in services excluding rent remained quite low at 0.52%. In the restaurant-hotel subgroup, the inflation of food services increased slightly compared to the previous month, while a decrease was observed in accommodation prices, resulting in a low monthly inflation of 1.35% for the group. In December, a decrease of 3.02% was seen in transportation services prices, while the communication subgroup experienced a monthly price increase of 1.44%, influenced by increases in landline calls and internet fees. During this period, the price increase in the other services group was moderate at 0.71%. In December, the annual inflation of the core material group decreased to 27.43% with a drop of 1.47 points.

NOTABLE INCREASE IN WHITE GOODS PRICES

On a monthly basis, core material inflation continued to remain low. During this period, durable goods prices increased by 1.62%, while the group's annual inflation decreased by 1.38 points to 22.46%. On a sub-item basis, prices of electrical and non-electrical appliances, led by white goods, increased significantly, while furniture prices saw a relatively more limited increase. Car prices remained stable during this period. Prices in the clothing and footwear group also decreased in December due to seasonal effects, while the annual inflation in this group increased by 0.95 points to 31.67%.

"FUEL PRICES INCREASED MODERATELY"

In other core goods, the price increase slowed to 1.56% compared to the previous month. Energy prices increased by 0.65% in December, while the group's annual inflation decreased by 2.97 points to 43.11%. With the contributions of developments in international oil prices, fuel prices increased moderately. Solid fuel and bottled gas prices recorded monthly increases of 3.04% and 0.27%, respectively.

Prices in the food and non-alcoholic beverages group increased by 1.29% in December, while annual inflation decreased by 4.99 points to 43.5%. Annual inflation in the unprocessed food group decreased by 9.50 points to 50.29%, while in the processed food group, it decreased by 1.43 points to 37.67%. In December, the moderate increase in unprocessed food group prices (0.86%) was primarily determined by the decline in the strong price increases observed in fresh fruits and vegetables over the past two months, while egg prices continued to rise. The increase in processed food prices rose to 1.71% compared to the previous month, with the effects of certain grain products and increases in international commodity prices, particularly in solid-liquid oils, confectionery-chocolate, cocoa, and coffee.

"PRODUCER PRICES DECREASED BY 0.95 POINTS IN DECEMBER"

Domestic producer prices increased by 0.40% in December, while annual inflation decreased by 0.95 points, finishing the year at 28.52%. During this period, the price increases in the durable and non-durable consumer goods groups were 1.41% and 1.48%, respectively, while energy prices showed a decrease of 3.37%. Intermediate goods recorded a moderate increase of 0.64%.