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Monday, February 26, 2024

Turkey. Inflation in May was 73.5 percent

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The inflation rate in Turkey jumped in May to the highest level in 24 years, 73.5%. Economists predicted that the result would be even higher, as the price increase was fueled by the war in Ukraine, rising energy prices and falling lira.

Inflation has risen since last fall, when the lira collapsed after the central bank started the 500bp cycle of easing demanded by the president Recep Tayyip Erdogan.

Inflation in Turkey is breaking records

The latest result exceeded the level of 73.2 percent. and is the highest since October 1998, when annual inflation was 76.6%. Economists estimated that the inflation rate would rise to 76.55 percent. Monthly consumer prices rose by 2.98 percent, the Turkish Statistical Institute reported on Friday, compared with the forecast of 4.8 percent. given in the Reuters survey.

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Transport and food costs increased by 108%, respectively. and 92 percent over the past year, reflecting the deepening economic crisis. Inhabitants find it increasingly difficult to obtain basic goods.

The domestic producer price index increased by 8.76 percent in May. month-on-month, and the year-on-year increase was 132.16%, reflecting a 20% decrease currency rate this year it caused a sharp increase in import costs. The lyre course dives, in 2021 by 44 percent. and this year by another 20 percent.

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When will inflation in Turkey fall?

In April, the central bank forecasted annual inflation to peak by June and then fall to nearly 43%. by the end of the year and to single-digit values ​​by the end of 2024.

The government has previously argued that inflation will fall to single-digit numbers next year as part of a new economic program focusing on low interest rates to stimulate production and exports and to achieve a current account surplus. However, data released on Thursday showed the trade deficit increased by 157% in May. year on year and amounted to USD 10.7 billion.

Economists believe inflation will remain high for the rest of 2022 due to the war, a weakening lira and the central bank’s reluctance to raise rates. The median estimate for inflation at the end of the year is 63%, compared with 52%. in a poll conducted last month.

Inflation in Turkey broke the 70 percent markShutterstock

Main photo source: Shutterstock

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