Türkiye’s inflation saw an increase from 68.5 percent in March to 69.80 in April, its highest level since late 2022, according to consumer price index data from the Central Bank of the Republic of Türkiye. Türkiye’s month-on-moth inflation increased by 3.18 percent, up from 3.16 percent in March, which falls in line with expectations, according to Mehmet Simsek, Minister of Finance.
Commenting on the figures, Simsek said on social media platform X: “After annual inflation reaches its peak in May, it will begin to decline sharply in line with our predictions. Thus, the transition period in the fight against inflation will end and we will enter the disinflation process.”
Consumer prices increase
According to the Turkish Statistical Institute, the most significant annual consumer price increases were observed in education, with prices rising by 103.86 percent. Meanwhile, prices in restaurants and hotels increased by 95.82 percent. Additionally, prices of food and non-alcoholic drinks increased by 68.50 percent. The inflationary pressures in these sectors significantly contributed to the overall rise in consumer prices.
Meanwhile, the domestic producer price index recorded a 3.6 percent month-on-month increase in April, with an annual rise to 55.66 percent, up from 51.47 percent in March.
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Central bank measures
The central bank has responded to the increase in inflation by implementing a series of rate hikes, totaling 3,650 basis points since June. The bank implemented the most recent hike of 500 basis points in March due to the deteriorating inflation outlook. While the bank held rates steady last month, it signaled readiness to tighten further in case of significant inflationary developments.
The central bank projects inflation to peak around 73 to 75 percent in May before starting its downward trajectory in the second half of the year. Hence, Türkiye aims to reach an inflation rate of 36 percent by the end of 2024.
Simsek added in his comment on X that economic balance, the decline in current account deficits, the re-established budget discipline, the increase in international resource inflows, and the tendency of domestic portfolio preferences towards the Turkish Lira have supported Türkiye’s fight against inflation.
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