Updated May 3rd, 2024 at 16:15 IST

Turkish annual inflation hits 69.8% in April, reaching highest level since late 2022

Turkish annual inflation peaks in education (103.86%) and restaurants/hotels (95.82%), with notable rises in food (68.50%).

Reported by: Business Desk
Inflation | Image:Unsplash
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Turkish inflation spikes: Turkish inflation has surged to nearly 70 per cent, marking its highest level since late 2022, driven by a notable increase in education, restaurants, and hotel prices, according to official data released on Friday.

Finance Minister Mehmet Simsek stated that April's month-on-month MoM inflation, at 3.18 per cent, was as anticipated. He projected a sharp decline in inflation after reaching its peak in May.

While slightly below expectations, the annual inflation rate came in at 69.8 per cent for April, according to a Reuters poll. However, economists predict a decrease to 43.5 per cent by the end of 2024 due to aggressive monetary tightening measures implemented over the past year.

Rapid price surges

The Turkish Statistical Institute reported the steepest annual consumer price rises in education (103.86 per cent) and restaurants and hotels (95.82 per cent), with food and non-alcoholic beverages also experiencing a significant increase (68.50 per cent).

In January and February, inflation rose by 6.7 per cent and 4.53 per cent respectively on a monthly basis, primarily due to a substantial minimum wage hike and adjustments in prices at the beginning of the year.

The Central Bank of Turkey has raised interest rates by 3,650 basis points since June, including a 500 basis-point increase in March in response to the deteriorating inflation outlook.

Central bank vigilant

While holding rates steady last month, the central bank acknowledged the delayed effects of tightening and pledged further action in case of a significant worsening of inflation.

The central bank anticipates inflation to peak at around 73-75 per cent in May before beginning to decline in the second half of the year, targeting 36 per cent by the end of 2024.

Data also showed that the domestic producer price index rose by 3.60 per cent MoM in April, with an annual increase of 55.66 per cent.

(With Reuters Inputs)

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Published May 3rd, 2024 at 16:15 IST