Turkey’s annual inflation accelerates to nearly 50 pct in July

Duvar English

The government-run Turkish Statistical Institute (TÜİK) on July 5 reported that the consumer price index (CPI) realized as 47.83% annually and 9.49% monthly in July. 

The CPI underwent significant changes compared to various time periods. On a month-on-month basis, the general index in CPI increased by 9.49 percent. When compared to December of the previous year, the index saw a larger rise of 31.14%. 

Furthermore, compared to the same month in the previous year, there was a substantial increase of 47.83%. Finally, on a twelve-month moving average basis, the index rose by 57.45%.

Thus, inflation, which had been on a downward trend for 8 months due to the base effect, started to rise again and the monthly CPI increased at the fastest rate in 17 months.

Housing with 19.31% was the main group that indicated the lowest annual increase. On the other hand, hotels, cafes, and restaurants with 82.62% was the main group where the highest annual increase realized.

While education showed the lowest monthly increase at 2.67 percent, transportation experienced the highest monthly increase, reaching 17.75 percent. 

ENAG sets annual inflation at 122 pct

According to unofficial data from Turkey’s Inflation Research Group (ENAG), an independent institution set up in 2020 to track the country’s inflation, Turkey’s annual CPI was 122.88% in July.

The institution announced a monthly increase of 13.18 percent in July and calculated January-July inflation as 69.21 percent.

After the TÜİK’s announcement, Treasury and Finance Minister Mehmet Şimşek made an announcement on Twitter and stated that they expect a decrease in annual inflation in mid-2024.

“We will support the disinflation process with fiscal discipline. The main objective of our policies is to permanently reduce inflation to single digits in the medium term,” he added.

The Central Bank recently raised its year-end inflation forecast from 22.3 percent to 58 percent.

Speaking at the third inflation report meeting of the year, the Bank’s Governor Hafize Gaye Erkan said: “We see the period after 2025 as the beginning of a period of stability. In this period, while the decline in inflation will accelerate, predictability will increase.”