While CPI increased by 3,51% monthly in November, above the expectations, annual inflation, which was 19,89% in October, rose to 21,31% in November. Thus, annual inflation saw its highest level since November 2018.
When the main expenditure groups are analyzed, transportation was the group that increased the most by 6,31% monthly due to the price hikes in fuel, while contributing 95 basis points to monthly inflation. Miscellaneous goods and services group, on the other hand, was the second group with the highest increase with 5,36%. While the food and non-alcoholic beverages group increased by 3,92%, it made the highest contribution to monthly inflation with a contribution of 105 basis points. There was no main expenditure group that experienced a monthly decrease.
On an annual basis, there was an increase in all 12 main expenditure groups. The restaurants and hotels group was the group that increased the most, with an annual increase of 28,90%, contributing 173 basis points to annual inflation. Food and non-alcoholic beverages, which have the highest weight in the inflation basket, were the second group that increased the most with 27,11% year-on-year, making the highest contribution to annual inflation with 690 basis points.
While the domestic producer price index (D-PPI) increased by 5,24% in October, it increased by 9,99% in November due to the sharp depreciation in TL. This was the highest monthly increase since September 2018. On an annual basis, it realized the highest increase since April 54,62 with 2002%.
When analyzed according to the four main sectors of the industry, electricity, gas and steam were the sectors that increased the most with 14,33% monthly, contributing 133 basis points to the monthly D-PPI. While manufacturing with the highest weight increased by 9,55% monthly, it was the sector that contributed the most to the monthly D-PPI with 826 basis points.
Electricity, gas and steam were the main sectors with the highest growth rate of 72,42% annually. While manufacturing increased by 53,24%, it made the highest contribution to the annual D-PPI with 4.641 basis points.
While the CBRT lowered the policy rate to 15% at its November meeting, the sharp depreciation in TL, the continuing widening of the PPI-CPI gap, the rise in oil and commodity prices, the hikes in alcohol and cigarettes, the large industrial and commercial market of BOTAŞ in December. We expect the upward trend in inflation to continue with the effect of the 20% hike in corporate subscriber groups and the natural gas tariffs used for electricity generation.
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