Türkiye’s annual inflation rose to 68.5 percent for the month of March, an increase on February’s 67.1 percent inflation read, according to the Türkiye Statistical Institute (TURKSTAT)’s report released Wednesday.
The monthly rise in consumer prices came out at 3.16 percent, led by education, communication, and hotels, restaurants and cafes, which saw month-on-month rises of 13 percent, 5.6 percent, and 3.9 percent, respectively.
Consumer Price Index, March 2024
Consumer price index (CPI) increased by 68.50% annually and 3.16% monthly
You can visit our website for details.🔎
↪️ https://t.co/WOEWWm0c1R— turkstat (@TurkStat) April 3, 2024
Read more: Egypt, Türkiye forge $7 billion investment deal for new industrial zone
On an annual basis, education again saw the highest cost inflation at 104 percent year-on-year, followed by hotels, restaurants and cafes at 95 percent and health at 80 percent.
Türkiye has launched a concerted effort to tackle soaring inflation with interest rate hikes, most recently raising the country’s key rate from 45 percent to 50 percent in late March.
Much of the inflation in recent months stems from a significant increase to the minimum wage that Türkiye’s government mandated for 2024. The minimum wage for the year rose to 17,002 Turkish lira (around $530) per month in January, a 100 percent hike from the same period a year prior.
Further rate hikes anticipated
According to economists, it is expected that the central bank will need to implement further rate hikes. In an analyst note on Wednesday, Nicholas Farr, an Emerging Europe economist at London-based Capital Economics, mentioned that although the March inflation count indicates the smallest monthly increase in three months and suggests that the impact of the large minimum wage hike in January may have largely passed, it is still not in line with the single-digit inflation target that policymakers aim to achieve.
“The latest inflation figures do little to change our view that further monetary tightening lies in store and that a more concerted effort to tighten fiscal policy will be needed too,” Farr said.
Türkiye’s central bank had previously implemented eight consecutive interest rate hikes from June 2023 to January 2024, amounting to a cumulative increase of 3,650 basis points. It paused in February, indicating that the tightening cycle had ended. However, it raised rates again in March, citing a “deterioration in the inflation outlook” and affirming that a “tight monetary stance will be maintained until a significant and sustained decline in the underlying trend of monthly inflation is observed.”
For more news on the economy, click here.
