Erhan Çetinkaya, the President of the Turkish Statistical Institute (TÜİK), met with Ankara representatives of press organizations and economic news directors to answer questions about inflation calculations and criticisms. Çetinkaya stated that inflation began to decline in June and that discussions on inflation calculations would continue and that the meeting was organized to convey accurate information.
Differences Between CPI and Cost of Living Index
TÜİK President Çetinkaya emphasized that the CPI measures the change in the general level of prices of goods and services that are subject to consumption expenditures, and stated that the cost of living index reflects the differences in the cost of a fixed “welfare” level. He also explained that the CPI does not measure the cost of living and that these two indices are different concepts.
Criticisms of CPI Calculations
Responding to criticisms regarding the calculation of the CPI, Çetinkaya stated that the CPI is calculated by compiling over 600 thousand prices per month and that inflation is aggregated by taking the weighted average of 600 thousand prices. He also stated that the item basket is fixed in the CPI calculations and that publishing item prices requires extra work.
ENAG and CPI Comparison
Çetinkaya stated that the monthly CPI rates published by ENAG are far from reflecting the truth, and that ENAG used an incorrect method when calculating rental prices, and this explains the difference between ENAG data and TÜİK data.
Other Topics
Çetinkaya emphasized that corporate profits in Turkey are a factor affecting inflation and that this situation has become more apparent after the pandemic. He also stated that Turkey has a similar approach to other countries in terms of how inflation is calculated in the world.
Çetinkaya drew attention to the fact that some increases will affect the July inflation figures as an important issue and the effect of stability in exchange rates on inflation. He also touched on the differences between the ITO Wage Earners’ Living Index and the CPI and explained the reasons for these differences.
