HOW DID THE CPI DECLINE?

Dünya Executive - - COMMENTARY -

The 1.44 percent decl ne n the consumer pr ces ndex s ma nly due to three factors we have already l sted. So wh ch of these was the most mportant? The total f ght aga nst nflat on program only slowed down the ncrease n pr ces. The decl ne was not due to th s. The underly ng cause of the 1.44 percent decl ne n CPI was the decl ne n the pr ce of fuel and the reduct on n VAT and SCT.

TurkStat follows the pr ce of 407 goods and serv ces n the consumer pr ces ndex. In November, 397 goods and serv ces were calculated by seasonal factors.

Half of the CPI s composed of 32 tems of goods and serv ces. The pr ce changes n these 32 tems negat vely affected the CPI by 1.2454 po nts n November. The rate in January due to the burden of taxation on the one hand and because of those retailers who will say: “Look, we made a discount to support the fight against inflation program; we made sacrifices. Now we will return to the old price.” Of course, when normal price increases in January and those made for some services within the framework of the nearly 24 percent revaluatio­n rate are total decl ne n CPI was

1.4429 percent. Accord ngly, the effect of the other 365 tems of goods and serv ces n November was a negat ve 0.11975 po nts. Automob les made the b ggest contr but on to the decl ne n pr ces. The follow ng are the top ten goods and serv ces w th the b ggest share n the decl ne n CPI and the r contr but on (negat ve):

D esel car 0.5591, gasol ne car 0.3000, tomatoes 0.1351, gasol ne 0.0998, nternet fees 0.0914, gold 0.0893, l v ng room sets 0.0647, art ckets 0.0620, eggs 0.0560, oranges 0.0493.

Onions, which increased in price by 51 percent in November, had the biggest effect in preventing the CPI reduction in November from being even higher. added, the CPI rate in January will be substantia­l.

D scount may be extended to Apr l

The peaking of prices in January will no doubt be of concern to the economic management team. Heading into local elections, rising inflation is undesirabl­e. That’s why the most important tool at hand is VAT and SCT, which is already in use. It is very likely that this reduction in automobile­s, white goods and furniture will be extended by three months or, alternativ­ely, it will be brought back to normal levels only gradually.

In any case, what to do next will be done after the election; what will happen will happen after the election!

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