Annual inflation climbs to 67 percent last month

ANKARA

Türkiye’s annual inflation rate accelerated from 64.86 percent in January to 67 percent in February, but the pace of monthly inflation increase slowed, the data from the Turkish Statistical Institute (TÜİK) have shown.

Consumer prices advanced 4.53 percent month-on-month, down from 6.7 percent in January.

Food and non-alcoholic beverage prices rose 8.25 percent for an annualized increase of 71.12 percent, while restaurant and hotel prices surged 5.4 percent in February.

Communication and transportation costs were up 4.3 percent and 2.85 percent, respectively. Clothing prices inched up 0.2 percent in February from the previous month, TÜİK said on March 4.

In February, within indices of 143 basic headings in the Consumer Price Index, the index of 12 basic headings decreased and the index of 6 basic headings remained unchanged, while the index of 125 basic headings increased, said the statistics authority.

Monthly core inflation, however, remained below the headline inflation.

Last month, the B-index, which excludes unprocessed food, energy, alcoholic beverages, tobacco products and gold, increased by 4.23 percent month-on-month and 70.3 percent year-on-year, respectively.

The increase in the C index, which excludes energy, food and non-alcoholic beverages, alcoholic beverages, tobacco products and gold, were 3.57 percent and 72.89 percent, respectively.

The Central Bank warned last month that stickiness in services inflation, geopolitical risks, and food prices keep inflation pressures alive.

At the Monetary Policy Committee (MPC) meeting held in February, the Central Bank held its key interest rate at 45 percent last month, pausing after eight straight increases aimed at taming consumer prices.

The current level of the policy rate will be maintained until there is a significant and sustained decline in the underlying trend of monthly inflation and until inflation expectations converge to the projected forecast range, the bank said.

Monetary policy stance will be tightened in case a significant and persistent deterioration in inflation outlook is anticipated, it added.

The bank stressed that the determination in a tight monetary stance will continue to contribute to Turkish Lira’s real appreciation process, which is a key element of disinflation.

In its quarterly inflation report released last month, the bank kept its inflation forecasts for 2024 and 2025 unchanged from the previous at 36 percent and 14 percent.