Turkey
Turkey’s yearly inflation surged to 68.5% in March, marking an uptick from February’s 67.1%, as reported by the Turkish Statistical Institute on Wednesday.
The monthly uptick in consumer prices stood at 3.16%, driven by increases in education, communication, and the hospitality sector, which experienced month-to-month increases of 13%, 5.6%, and 3.9%, respectively.On an annual basis, education registered the highest inflation rate at 104% year-on-year, followed by the hospitality sector at 95%, and health at 80%.In response to the soaring inflation, Turkey has undertaken significant measures, including successive interest rate hikes. Most recently, the country raised its key rate from 45% to 50% in late March.
In March, consumer inflation accelerated to 68.5%, slightly below analysts’ expectations but higher than February’s 67.1%. The median estimate in a Bloomberg survey of economists had projected 69.1%. Services, education, and food were significant drivers of this increase. Core inflation, excluding volatile items such as food and energy, reached a record high of 75.2%, up from 72.9% in February.
In Sunday’s local elections, President Recep Tayyip Erdogan faced an unprecedented setback, as Turkey’s cost of living crisis played a role in the opposition’s victory in crucial cities like Istanbul and Ankara. Now that the elections are over, investors are closely monitoring for indications of ongoing consistency in monetary policy and enhanced fiscal discipline. Analysts at Deutsche Bank AG are particularly interested in potential changes to energy tariffs and measures for fiscal consolidation, which could affect the trajectory of inflation.
