Annual inflation rate slows to 37.9 pct, lowest since 2021

ANKARA

The annual inflation rate in Türkiye was 37.86 percent in April, down from 38.1 percent in March, official figures from the Turkish Statistical Institute (TÜİK) showed on May 5.

The April rate was the lowest since December 2021, when it was 36.08 percent. The annual inflation rate slowed for the 11th month in a row in April.

Inflation is very likely to remain within the Central Bank’s forecast range of 19 to 29 percent this year, Finance Minister Mehmet Şimşek said after the inflation data was unveiled.

“We implemented the program decisively and will continue to do so. We expect disinflation to continue in the second half of this year,” Şimşek said in a televised interview on May 5.

The medium-term program assumed an oil price of around $84, the minister recalled.

“Currently, there is a significant decline in oil prices and this decrease will have a strong impact [on inflation]. If oil prices remain at this level, they could lower inflation by at least 1.2 points,” Şimşek said.

Consumer prices advanced 3 percent month-on-month, up from 2.46 percent in March, according to TÜİK data.

The monthly and annual inflation rates were better than expectations. Economists predicted the April monthly and annual inflation at 3.24 percent and 38.18 percent, respectively.

According to TÜİK data, the highest price hikes were observed in education at 79.2 percent, housing at 74.07 percent and health at 41.99 percent on a yearly basis.

The lowest rates were recorded in clothing and footwear at 16.92 percent, communications at 21.31 percent and transport at 22.76 percent.

Food and non-alcoholic beverage prices rose by 2 percent month-on-month in April, bringing the annual food inflation to 36 percent.

Prices at hotels, cafes and restaurants increased by 3.6 percent monthly and 41.87 percent annually, the statistics authority said.

The B-index, one of the Central Bank’s favored core inflation indicators, which excludes prices of unprocessed food, energy, alcoholic beverages, tobacco products and gold, rose 3.1 percent in April, accelerating down the previous month’s 1.30 percent.

The bank’s other favored gauge of core inflation, the C-index, which excludes energy, food and non-alcoholic beverages, alcoholic beverages, tobacco and gold prices, posted a monthly increase of 3.34 percent, rising from 1.46 percent in March.

Türkiye’s annual inflation exceeded 75 percent in May 2024, before starting to slow in June.

The decline prompted the Central Bank to lower its benchmark interest rate from 50 percent to 42.5 percent, although last month it hiked the rate to 46 percent.

The next meeting of the bank’s Monetary Policy Committee, which decides about the policy rate, is scheduled for June 19.