Türkiye Market Bulletin: Issue No. 29, Quarter 1 2024 (January – March) – Türkiye

HIGHLIGHTS

• USD Appreciation and Exchange Rate Fluctuations: The USD experienced significant appreciation in early 2024, influencing the USD/TRY exchange rate, which increased from TRY 29.02 in December 2023 to TRY 31.73 in March 2024, partly impacted by uncertainties surrounding local elections.

• Inflation Dynamics: The annual inflation rate continued to rise, reaching 68.5 percent in March 2024. Notably, health expenses saw the highest increase in January, followed by education expenditures in February and March. The food inflation rate remained high but relatively stable, recorded at 70.4 percent in March 2024. The gap between food and annual inflation is narrowing.

• Production and Economic Growth: The Turkish economy grew by 5.7 percent in Q1 2024, with investment making the highest contribution at 10.3 percent. Construction led with an 11.1 percent growth, followed by manufacturing and agriculture.

• Domestic Producers’ Price Index (D-PPI): Reflecting inflationary pressures, the D-PPI increased to 51.5 percent in March 2024, signaling continued high inflation rates. This index continued its upward trajectory, indicating input cost inflation.

• Unemployment Trends: As of March 2024, the unemployment rate is 8.6 percent. Despite a decrease in overall unemployment rates in Q1 2024, youth unemployment remained high. However, employment opportunities expanded, with a higher increase observed among men compared to women.

• Global Food Price Index and MEB Calculation: The global food price index saw an uptick in March 2024, driven by increases in vegetable oil, dairy, and meat prices. The cost of the Minimum Expenditure Basket (MEB)1 is TRY 2,525 per person per month as of March 2024, representing a yearly increase of 70 percent compared to March 2023 (TRY 1,482). The Earthquake MEB costs TRY 2,726 per person per month, highlighting heightened humanitarian needs in affected areas.