- ORIGINAL NEWS
Turkey’s inflation sees biggest monthly jump since August, nears 65% year on year
- SUMMARY
Turkey’s annual inflation rate reached 64.86% in January, a significant increase from the 64.77% recorded in December.
Sectors like health, hotels, and miscellaneous goods experienced substantial price increases.
The rise in inflation is attributed to a 100% hike in the minimum wage mandated by the government for 2024.
In response to the escalating inflation, Turkey’s central bank has been implementing interest rate increases since May 2023, with a total increase of 3,650 basis points.
The interest rate was recently raised by 250 basis points to 45%.
The Turkish lira has undergone a steep depreciation against the US dollar, losing 38% of its value over the past year and 80% over the last five years.
Turkey’s central bank governor, Hafize Gaye Erkan, resigned amidst controversies and was replaced by deputy governor Fatih Karahan.
While inflation did not rise more than expected in January, it highlights the persistence of services inflation and poses a challenge for the new central bank governor to resume the tightening cycle.
The end-year inflation forecast of 36% remains unchanged.
- NEWS SENTIMENT CHECK
- Overall sentiment:
negative
Positive
“Clothing and footwear was the only sector showing a monthly price decrease, with -1.61%.”
Negative
“Turkish inflation logged its biggest monthly jump since August with a 6.7% rise from December, while year-on-year inflation hit nearly 65%.”
“Food, beverages and tobacco, as well as transportation, all increased between roughly 5% and 7% month on month, while housing was up 7.4% since December.”