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Evaluation Note/Doç. Dr. Alpay Filiztekin "On March Inflation Rates"
12/04/2007 - Viewed 1657 times

March inflation rate which was announced recently has aroused indignation due to the change made in the calculation of Consumer Price Index (CPI) by Turkish Statistical Institute (TURKSTAT). In its announcement, the Central Bank, even in partly, used this change to account for the gap between the expectations figured by using the data for February at the beginning of March and the realization. Yet, this conduct was interpreted as a "trick" on the press. The main point is that we are confused about why and how the index is calculated. Therefore, there is need for a short explanation to understand what has happened last month even a bit better.

 

Firstly, we have to consider what would have happened if TURKSTAT hadn't made such a change. In order to make this calculation, we have to know the weights of the goods in the basket in detail. Unfortunately, we don't have this information as they are classified. However, we are able to derive some information from the announcements by TURKSTAT. Share of the Communication Main Group, in which the change is made, in the whole basket is 4.41%. Postal Services, Telephone and Telefax Equipments, and Telephone and Telefax Services are included in this group. We don't know the weights of these sub-groups. On the other hand, we learnt that prices in Postal Services group remained constant; yet, prices in Telephone and Telefax Equipment sub-group decreased by 5.4%. The main point is that Telephone and Telefax Services, this time, have been detailed, and that some prices in this detail have increased while some others have decreased.

 

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