Monthly inflation declines ‘in line with gov’t projections’

ANKARA

Finance Minister Mehmet Şimşek said on April 3 that the decline in monthly inflation will continue after the numbers for March were announced.

Türkiye's annual inflation rate was 68.5 percent in March, up from 67.07 percent in February, official figures showed on April 3. According to the Turkish Statistical Institute (TÜİK), the inflation rate was 3.16 percent in March on a monthly basis, decreasing from 4.53 percent in February.

“Monthly inflation declined in March in line with our projections,” Şimşek wrote on X after the numbers were announced.

“The further tightening of monetary policy will contribute significantly to the rebalancing of demand, while the further increase in external financing possibilities will strengthen macro-financial stability,” he said.

The government “will do whatever is necessary to achieve our primary objective of price stability,” the minister added.

“Together with the tightening of fiscal policy through expenditure control, all these developments will anchor inflation expectations and support the disinflation process,” Şimşek said.

TÜİK data showed that the highest annual price increase was seen in the education sector at 104.07 percent, followed by restaurants and hotels at 94.97 percent and health at 80.25 percent.

The lowest inflation rates were posted by apparel and shoes at 50.1 percent, housing at 51.17 percent and telecommunication at 59.54 percent.

In March 2024, alcoholic beverages and tobacco with -0.02 percent was the main group that indicated the monthly decrease.

On the other hand, education with 13.08 percent was the main group where the highest monthly increase was realized.

In March, within indices of 143 basic headings in the index, the index of 14 basic headings decreased and the index of 8 basic headings remained unchanged, while the index of 121 basic headings increased.

At the Monetary Policy Committee (MPC) meeting held in March, the Central Bank decided to opt for lifting the key policy rate, increasing the one-week repo auction rate from 45 percent to 50 percent.

In response to the deterioration in the inflation outlook, the committee decided to raise the policy rate, the bank said in a statement released after the MPC meeting.

A tight monetary stance will be maintained until a significant and sustained decline in the underlying trend of monthly inflation is observed and inflation expectations converge to the projected forecast range, the statement added.

The committee also decided to adjust the monetary policy operational framework by setting the Central Bank overnight borrowing and lending rates 300 basis points below and above the one-week repo auction rate, respectively, the bank said in the statement.