Inflation in Türkiye rose near 70%, recording the highest level since 2022

Official data released on Friday revealed that annual consumer price inflation in Turkey surged to 69.8 percent in April, marking the highest level since late 2022. This figure, while slightly below expectations, was primarily driven by significant increases in education, restaurant, and hotel prices.

According to the Turkish Statistical Institute, consumer price inflation in April stood at 3.18 percent on a monthly basis, compared to 3.16 percent in March. A Reuters poll had anticipated annual inflation to reach 70.33 percent in April, with expectations of a decline to 43.5 percent by the end of 2024 as the impact of the monetary tightening cycle unfolds over the year.

The education sector saw the largest annual increase in consumer prices, soaring by 103.86 percent, followed closely by the restaurants and hotels sector, which witnessed a rise of 95.82 percent. Additionally, prices of food and non-alcoholic beverages surged by 68.50 percent.

In January and February, inflation experienced monthly increases of 6.7 percent and 4.53 percent respectively, largely attributed to a substantial rise in the minimum wage and a series of price adjustments at the beginning of the new year.

The central bank has implemented interest rate hikes totaling 3,650 basis points since June, including a 500 basis point increase in March due to worsening inflation expectations. Despite maintaining interest rates unchanged last month, the bank suggested that the effects of monetary tightening were delayed and pledged to further tighten monetary policy in the event of significant inflation deterioration.

The central bank forecasts inflation to peak at around 73-75 percent in May before gradually declining in the second half of the year, reaching 36 percent by the end of 2024.

Additionally, data indicated that the domestic producer price index rose by 3.60 percent on a monthly basis in April, with an annual increase of 55.66 percent.