TurkStat chair defends institution amid inflation calculation criticisms
In response to growing criticisms of its inflation calculations, the chair of the Turkish Statistical Institute (TurkStat), Erhan Çetinkaya, addressed the media to defend the institution's methods. This comes after allegations that TurkStat manipulated inflation data to keep retirement adjustments low.
According to TurkStat, the Consumer Price Index (CPI) in June 2024 showed a monthly increase of 1.64%, a year-to-date increase of 24.73%, and an annual increase of 71.60%. This data has resulted in a 24.73% increase in pensions and a 19% increase in civil servant pensions. Critics argue that these figures are manipulated to minimize government expenses on pension adjustments.
Turkey's statistical authority under fire as inflation at lowest level in 18 months
Çetinkaya stated, "We are observing a downward trend in inflation starting from June," noting that the controversy over inflation calculations is likely to continue, emphasizing the importance of providing accurate information to the public.
Addressing the criticism of stopping the publication of item prices in the inflation basket, Çetinkaya explained, "We calculate the CPI by compiling over 600,000 prices across Turkey monthly. These prices are aggregated as weighted averages. The basket remains unchanged; what we no longer publish are the item prices. Publishing these requires an extra day's work, which we have deemed unnecessary."
Çetinkaya highlighted that no EU member or candidate country, EFTA country, the USA, or Canada publishes item-level prices on their statistical websites, suggesting that TurkStat faces unfair criticism in this regard.
Comparison to ENAG figures
Regarding the alternative inflation calculations by the Inflation Research Group (ENAG), Çetinkaya remarked, "ENAG's monthly CPI figures do not reflect reality. Their methodology, accessible on their website, lacks transparency." Established in 2021 by a group of economists questioning TurkStat's reliability, ENAG reported June inflation at 4.27% and annual inflation at 113%.
Çetinkaya criticized ENAG's methodology, particularly their approach to calculating rent prices. He stated, "ENAG assumes that all renters change homes monthly and uses real estate website data, leading to inflated figures. TurkStat, however, tracks over 5,000 rental units with fixed definitions and quality."
ENAG January inflation rate doubles TurkStat
Addressing the broader economic context, Çetinkaya noted, "Company profits in Turkey have significantly contributed to inflation. Businesses are taking advantage of the inflationary environment to achieve excessive profits beyond what would be typical."
He concluded by comparing perceived and official inflation rates globally, "In Turkey, perceived inflation is about twice the official rate, whereas in the EU, it has been five times the official rate over the past 20 years."