Technical support for unmet targets

Havva Gümüşkaya

The inflation indicator is being brought into line with the EU framework. In the EU, housing, food and transport expenditure accounts for 49.5 per cent of total household expenditure. In Turkey, the share of the same three items reaches 65.7 per cent. With the change in methodology to be implemented in 2026, the gap between perceived inflation and official inflation may widen further.

A briefing meeting was held at the Turkish Statistical Institute (TÜİK) regarding the update of the CPI base year and changes to be made to the calculation system. At the meeting, the institution's experts explained the inflation calculation that will change in the new year.

Although seemingly a technical adjustment, the new calculation method, which is particularly important in terms of perceived inflation, will update the CPI base year to ‘2025=100’ from January 2026 onwards. This change will be mandatory for all EU member states. Therefore, there will be no change in headline inflation indicators for the 2003=100 base year period, but differences may be seen in some sub-indices due to classification changes.

In the new CPI series, group-level weights will be derived from national accounts household final consumption expenditure data. Sub-level weights will continue to be determined by the household budget survey.

The index will have 13 main expenditure groups. Personal care, social protection, and miscellaneous goods and services will be divided into two main expenditure groups. Insurance and financial services will be included in the inflation calculation as a new expenditure group. In addition, digital content will be presented as a separate category with the change.

Thanks to multi-source data sets such as tax, production and sales statistics, unrecorded consumption items will also be reflected in total expenditure.

The most significant change in the new calculation method concerns the weighting of rental expenditure. The weight of some expenditure items in the inflation calculation will decrease, while that of others will increase. The imputed rent, defined as “the rental value of the dwelling occupied by households that are homeowners, live in company accommodation or live in a relative's home, etc., and do not pay any rent”, will not be included in the CPI calculation. Thus, the weight of housing and rent in the inflation calculation will decrease.

THE WEIGHT OF RENT IN THE ACCOUNT IS DECREASING

The weight of the housing expenditure group in the 2025 inflation calculation is 15.21 per cent, while the weight of actual rent in the inflation calculation is 6.8 per cent. While the current calculation method does not reflect the actual inflation experienced by tenants, the decrease in the weight of rent will further distance the Turkish Statistical Institute (TÜİK) from the realities of the people.

THE GAP BETWEEN PERCEIVED AND INFLATION WILL WIDEN

As the inflation indicator is brought into line with the EU framework, income inequality in Turkey and the high share of essential expenses in household budgets will widen the gap between perceived and official inflation.

According to Eurostat data, 23.6 per cent of household expenditure in the EU was allocated to housing in 2024. Food and non-alcoholic beverages accounted for 13.2 per cent, while transport expenditure ranked third at 12.7 per cent. These three categories together accounted for 49.5% of total household expenditure.

However, in Turkey, the share of these three items in household consumption expenditure is much higher. According to TÜİK's 2024 calculations, housing and rent expenditure accounted for the highest share of consumer spending, at 26%. Transportation expenses ranked second with 21.6 per cent, while food and non-alcoholic beverages ranked third with 18.1 per cent. These three categories accounted for 65.7 per cent of total expenditure.

In low-income households, these three expenditure groups accounted for 73.7 per cent of total expenditure. The lowest income group allocated 33.2 per cent to housing and rent expenditure, 30.4 per cent to food and non-alcoholic beverage expenditure, and 10.1 per cent to transport expenditure.

DISCRIMINATORY INVITATION DRAWS CRITICISM

While academics, economists, columnists and representatives of the financial sector were invited to the meeting, numerous journalists, primarily from trade union research units, and relevant experts from labour organisations were not invited. Criticism that the invitations were selective led to assessments that TÜİK had acted contrary to the principles of transparency and inclusiveness on a matter of direct public interest.

Note: This article is translated from the original article titled Tutmayan hedefe ‘teknik’ destek, published in BirGün newspaper on December 11, 2025.