According to Total News, citing Turkish Statistical Institute, consumer prices have increased by 75.45% annually and 3.37% monthly in May. The sectors that had the strongest annual price increase were education sector with 104.8%, housing with 93.2% and hotels, cafes and restaurants with 92.9% increase.
Economists had previously predicted that inflation in this country of 85 million people would reach 75%. Turkey has been on a year-long adventure of continuously raising interest rates in an attempt to lower prices, leading to significant financial hardship for the average consumer in the country.
The Central Bank of Turkey has kept its interest rate at 50% since March, referring to the need to continue to deal with the increase in inflation in this country. The bank said at the time that the tight monetary stance would be maintained until a significant and sustained decline in the underlying monthly inflation trend was observed. The 3.4 percent month-on-month increase in the consumer price index in May was higher than in March and April, which made some analysts consider the price reduction process more complicated than expected.
Liam Peach, Chief Economist of Emerging Markets at London-based Capital Economics, said, “Inflation has now reached its peak, but considering that the release of new statistics contains some unpleasant events, the pace of inflation in the second half of the year seems a little more uncertain.” Economists expect this jump to be the peak before prices begin to decline.
The company previously expected inflation to drop to 41 percent by the end of the year, while Turkey’s central bank predicted it would reach 38 percent by then. According to economists, based on the current pace of inflation, they may end this year at a slightly higher rate, and a long pause in interest rate changes is likely for a longer period of time.