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Türkiye's Inflation Ticks up to 62%

A woman shops at a street market in Istanbul, Türkiye, 04 December 2023. (EPA)
A woman shops at a street market in Istanbul, Türkiye, 04 December 2023. (EPA)
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Türkiye's Inflation Ticks up to 62%

A woman shops at a street market in Istanbul, Türkiye, 04 December 2023. (EPA)
A woman shops at a street market in Istanbul, Türkiye, 04 December 2023. (EPA)

Türkiye's annual inflation rate ticked up slightly in November, the state statistics agency said on Monday, showing further signs of levelling off following a series of sharp interest rate hikes.

The rate moved to 61.98 percent last month from 61.36 percent in October, the TUIK state statistics agency said.

The pace at which consumer prices are rising has started to ease, after six successive months of interest rate hikes took borrowing cost to 40 percent from 8.5 percent.

Analysts are penciling in a final rate hike of 2.5 percentage points at the central bank's next policy meeting on December 21.

The latest batch of data show higher borrowing costs starting to slow down consumption -- a key goal of the central bank.

Türkiye's gross domestic product rose by just 0.3 percent between July and September. It had risen by 3.3 between April and June.

"The central bank will welcome these figures as evidence that demand is cooling and inflation pressures continue to soften," said analyst Liam Peach of Capital Economics.

Reset will take time

"However, bringing inflation down to much lower levels will require monetary policy to remain tight for a prolonged period and we expect the central bank to leave interest rates unchanged throughout 2024," Peach said.

Signs of Türkiye's economy starting to emerge from crisis are starting to be noticed by foreign investors, who had pulled out of the market because of President Recep Tayyip Erdogan's unpredictable past policies.

Analysts blame Erdogan for setting off the inflation spiral by forcing the nominally independent central bank to slash borrowing costs far below the rate at which prices were rising.

The official annual inflation rate peaked at 85.51 percent in October 2022.

Standard and Poor's revised Türkiye's long-term sovereign credit rating to positive from stable last month.

"Inflation appears to have peaked, albeit at elevated levels of over 60 percent," the ratings agency said.

But it also warned: "The policy reset will take at least two years to tame inflation."

Türkiye's central bank expects inflation to peak in May of next year at between 70 and 75 percent.

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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)

Telecommunications companies listed on the Saudi Stock Exchange (Tadawul) achieved a 12.46 percent growth in their net profits, which reached SAR 4.07 billion ($1.09 billion) during the second quarter of 2024, compared to SAR 3.62 billion ($965 million) during the same period last year.

They also recorded a 4.76 percent growth in revenues during the same quarter, after achieving sales worth more than SAR 26.18 billion ($7 billion), compared to SAR 24.99 billion ($6.66 billion) in the same quarter of 2023.

The growth in the revenues and net profitability is the result of several factors, including the increase in sales volume and revenues, especially in the business sector and fifth generation services, as well as the decrease in operating expenses and the focus on improving operational efficiency, controlling costs, and moving towards investment in infrastructure.

The sector comprises four companies, three of which conclude their fiscal year in December: Saudi Telecom Company (STC), Mobily, and Zain Saudi Arabia. The fiscal year of Etihad Atheeb Telecommunications Company (GO) ends on March 31.

According to its financial results announced on Tadawul, Etihad Etisalat Company (Mobily) achieved a 33 percent growth rate of profits, bringing its profits to SAR 661 million by the end of the second quarter of 2024, compared to SAR 497 million during the same period in 2023. The company also achieved a 4.59 percent growth in revenues to reach SAR 4.47 billion, compared to SAR 4.27 billion in the same quarter of last year.

The Saudi Telecom Company achieved the highest net profits among the sector’s companies, at about SAR 3.304 billion in the second quarter of 2024, compared to SAR 3.008 billion in the same quarter of 2023. The company registered a growth of 4.52 percent in revenues.

On the other hand, the revenues of the Saudi Mobile Telecommunications Company (Zain Saudi Arabia) increased by about 6.69 percent, as it recorded SAR 2.55 billion during the second quarter of 2024, compared to SAR 2.39 billion in the same period last year.

Commenting on the quarterly results of the sector’s companies, and the varying net profits, the head of asset management at Rassanah Capital, Thamer Al-Saeed, told Asharq Al-Awsat that the Saudi Telecom Company remains the sector leader in terms of customer base expansion.

He also noted the continued efforts of Mobily and Zain to offer many diverse products and other services.

Financial advisor at the Arab Trader Mohammed Al-Maymouni said the financial results of telecom sector companies have maintained a steady growth, up to 12 percent, adding that Mobily witnessed strong progress compared to the rest of the companies, despite the great competition which affected its revenues.

He added that Zain was moving at a good pace and its revenues have improved during the second quarter of 2024. However, its profits were affected by an increase in the financing cost by SAR 26.5 million riyals and a rise in interest, while net income declined significantly compared to the previous year, during which the company made exceptional returns.