(Bloomberg) -- Turkish inflation rate inched up in January as skyrocketing food prices offset the impact from tax breaks on utilities and key goods.

Consumer prices rose 20.4 percent in January from a year earlier, compared with an increase of 20.3 percent in December, Turkstat said on Monday. The median estimate in a Bloomberg survey of 23 analysts was for an annual rate of 20.3 percent.

Key Insights

  • Food price increases accelerated to 31 percent from 25.1 percent the previous month, well above the central bank’s year-end forecast of 13 percent. That’s the highest reading according to data going back to 2004.
  • While price pressures are strong across the economy, rising food prices reflect a supply shock from last month’s flash floods in Antalya, Turkey’s hub for greenhouses.
  • Producer price inflation slowed to 32.9 percent from 33.6 percent, showing that manufacturers and service providers are less eager to pass on the rise in costs from the lira’s weakness in 2018 to consumers.
  • Energy inflation slowed to 13.1 percent from 20.8 percent. The slowdown is a sign that the 10 percent cut on gas and power prices announced by President Recep Tayyip Erdogan last month is being felt by consumers.
  • A core index that strips out the impact of volatile items such as gold, food and energy dropped by half of a percentage point to 19 percent, showing some improvement in underlying price dynamics.


  • The lira weakened after the report and was trading 0.44 percent lower at 5.2317 per dollar at 10:15 a.m. in Istanbul.

Know More

  • Read more on the central bank’s inflation expectations here.

(Updates with more details.)

To contact the reporter on this story: Cagan Koc in Istanbul at ckoc2@bloomberg.net

To contact the editors responsible for this story: Onur Ant at oant@bloomberg.net, ;Shaji Mathew at shajimathew@bloomberg.net, Taylan Bilgic

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