Core Inflation (B and C Indices)
Contents
Key Points
- The most watched are the B and C indices: B excludes unprocessed food, energy, alcoholic beverages, tobacco products and gold from the CPI, while C excludes energy, food and non-alcoholic beverages, alcoholic beverages, tobacco products and gold.
- Central banks look at core measures alongside headline inflation in policy decisions because they better reflect how persistent and widespread price increases are.
- low core inflation does not mean the price rises households experience are low; food and energy take a large share of budgets.
Formula / Calculation
Annual core inflation = (This month’s C index / C index for the same month last year) − 1. The gap between headline CPI and the core index shows the contribution of the excluded items.
Interpretation
Central banks look at core measures alongside headline inflation in policy decisions because they better reflect how persistent and widespread price increases are. The CBRT’s MPC statements regularly refer to underlying trend indicators.
Pitfalls
low core inflation does not mean the price rises households experience are low; food and energy take a large share of budgets. Item definitions and weights can be revised with TurkStat methodology changes.
Official Sources
Official regulation and sources the definition is based on.
Pages Where This Term Appears
Related Terms
Frequently Asked Questions
What is Core inflation (B and C indices)?
Core inflation is a measure calculated by excluding items whose prices swing sharply on temporary or external factors, showing the underlying trend of inflation.
How is Core inflation (B and C indices) calculated?
Annual core inflation = (This month’s C index / C index for the same month last year) − 1. The gap between headline CPI and the core index shows the contribution of the excluded items.
Prepared by: Yatırımcı.AI Research TeamLast reviewed: Method: MethodologyEditorial policy