Turkish inflation maintains upward trajectory despite tightening central bank monetary policies


(MENAFN) Despite the Turkish Central Bank's efforts to implement tight monetary policies, inflation in Turkey has maintained an upward trajectory, reaching 68.5 percent in March. This figure marks a slight increase from the 67.1 percent recorded in February. The uptick in inflation comes as official data revealed that the cost of living continues to soar, a factor that has contributed to public dissatisfaction, particularly following the recent local elections in which President Recep Tayyip Erdogan's party suffered significant losses.

The Turkish Statistical Institute reported that monthly inflation stood at 3.16 percent in March, down from 4.53 percent in February and 6.7 percent in January. This moderation in monthly inflation can be attributed to a decline in the impact of salary adjustments and higher prices observed at the beginning of the year.

Despite expectations for a slight easing in inflation, a Reuters poll projected an annual inflation rate of 69.1 percent in March, representing a monthly increase of 3.5 percent. However, analysts anticipate a gradual decline in the annual inflation rate to approximately 43.75 percent by the end of 2024.

Independent economists affiliated with the Inflation Research Group estimated that the inflation rate reached a staggering 124.63 percent over the past 12 months, with prices surging by 5.68 percent within a single month. Notably, the price hikes have been particularly pronounced in key sectors, including education (up 140.1 percent), health (up 80.25 percent), transportation (up 79.9 percent), and food products (up 70.4 percent).

The persistent rise in inflation in Turkey can be attributed to the ongoing depreciation of the Turkish lira, which has experienced nearly continuous declines in value. This depreciation has exerted upward pressure on prices across various sectors, exacerbating the challenges faced by Turkish consumers and posing significant economic policy challenges for the government.

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