A money changer holds Turkish lira and U.S. dollar banknotes at an exchange office in Ankara, Turkey, December 16, 2021.
Cagla Gurdogan | Reuters
Turkey’s annual inflation rate rose to 68.5% in March, up from the 67.1% inflation rate in February, according to the Turkish Statistics Institute report released on Wednesday.
The monthly increase in consumer prices stood at 3.16%, led by education, communications and hotels, restaurants and cafes, which registered a month-on-month increase of 13%, 5.6% and 3.9%, respectively.
On an annual basis, education again recorded the highest cost inflation at 104% year-on-year, followed by hotels, restaurants and cafes at 95% and healthcare at 80%.
Turkey has made a concerted effort to combat rising inflation with interest rate hikes, most recently raising the country’s key interest rate from 45% to 50% in late March.
Much of the inflation in recent months is due to a significant increase in the minimum wage that the Turkish government has mandated for 2024. The minimum wage for the year rose to 17,002 Turkish lira (around $530) per month in January, a 100% increase over the same period a year earlier.
Economists assume that further interest rate hikes by the central bank will be necessary.
While March’s inflation numbers “represent the smallest monthly increase in three months and suggest that the impact of January’s big minimum wage increase is now largely over, it is still far from the single-digit inflation that policymakers are aiming to achieve,” wrote Nicholas Farr, emerging Europe economist at Capital Economics in London, said in an analyst note on Wednesday.
“The latest inflation numbers do little to change our view that further monetary tightening is imminent and that a more concerted effort to tighten fiscal policy will also be required,” he said.
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2024-04-03 07:52:05
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