Türkiye records annual inflation at 64.86% in January

Monthly inflation in January increased by 6.7% due to temporary effects, while annual inflation is recorded at 64.9%, says minister

Türkiye’s annual inflation rate was 64.86% in January, the country’s statistical office TurkStat said Monday.

Hotels, cafes and restaurants posted the highest increase on a yearly basis in the month with 92.27%, while clothing and footwear saw the lowest with 40.62%.

On a monthly basis, consumer prices increased by 6.7% in January.

The 12-month rolling inflation rate was at 54.72% in January 2024, TurkStat added.

An Anadolu survey predicted a 64.77% rise for annual and a 6.84% rise for monthly indexes last week.

Finance Minister Mehmet Simsek said on X that monthly inflation in January rose 6.7% due to temporary effects, while annual inflation was realized at 64.9%.

He stressed that these temporary effects, primarily reflected in the January rate, are not expected to affect the tendency of the inflation trend.

“As of February, we expect monthly inflation to fall significantly and remain aligned with our forecast path. Annual inflation will see a significant decline in the second half of the year,” he added.

“Maintaining price stability is our main priority,” he said.

Inflation remains a pressing issue for President Recep Tayyip Erdogan’s government ahead of local elections in March.

His ruling AKP party is trying to regain control of major cities, including Istanbul and the capital, Ankara, which the main opposition party currently holds.

Türkiye’s central bank, which has raised its key rate from 8.5% to 45% since June, said last month that the level was sufficient to start easing the cost-of-living crisis.

The bank’s governor, Hafize Gaye Erkan, resigned on Friday, less than a year into her tenure, after a scandal involving her family.

Analysts said that she was replaced by Fatih Karahan, a former Federal Reserve Bank of New York economist and the U.S. online retail giant Amazon, who may be under pressure to start raising the interest rate again.

“The arguments in favor of restarting the tightening cycle with another interest rate hike later this month are compelling and would underline the central bank’s commitment to tackle inflation – and help to build Governor Karaham’s credibility,” Capital Economics analyst Liam Peach said.

Source: AA & AFP