Turkish Statistical Institute (TurkStat) calculates the perceived inflation as 2 times the announced inflation. The institution considers the public’s distrust of official statistics, especially data that directly affect people’s lives, such as inflation, as a problem that applies to all countries.
The high inflation we have been experiencing has led the Turkish Statistical Institute to think about the inflation felt by citizens, as the leading central banks have done (FED, ECB, BOJ, etc.).
According to TurkStat’s calculations, consumer inflation in 2023 was 64.7 percent, which citizens can feel at around 129.4 percent.
According to the information compiled by EKONOMİ newspaper from the statements and presentations made by TurkStat officials; Although the institution does not officially announce it like the ECB, it has calculated the felt inflation as 2 times the announced inflation, taking into account the consumption habits and spending patterns of citizens.
TurkStat’s calculation of perceived inflation is based on the responses to questions in the Consumer Tendency Survey, which has been conducted for years.
TurkStat now sees the public’s distrust of official statistics, especially official data that directly affect people’s lives, such as inflation, as a problem that applies to all countries.
According to TurkStat, it is not possible to compare the CPI data with the data of the Inflation Research Group (ENAG), whose data series are not accessible, which puts inflation for 2023 at 127 percent. The structural difference between the TurkStat and Istanbul Chamber of Commerce (ITO) indices has been creating a difference in measurements for years, and high inflation has made this difference more pronounced.
According to the studies conducted in the article, various reasons why perceived inflation is higher than measured inflation are listed as follows:
* Consumers’ income levels, spending patterns and consumption habits differ from person to person, the most commonly used basket of goods and services used in determining the CPI rate varies according to individuals
*Although all products in the CPI basket show different monthly and annual price movements, individuals focus on the prices of goods and services they consume frequently.
*Individuals assess by taking into account only a limited number of product prices (an average of five products) that show a high increase in the relevant period, not the prices that fall and remain constant; they form the inflation they feel accordingly.
*The CPI index measures the change in the general level of prices over time, and the published data mainly refer to monthly or annual increases, whereas individuals’ memories often go back much further when forming expectations about the prices of goods and services; citizens can compare the prices of products in the current period with the prices of products in the past.