Türkiye’s annual inflation eases to 30.9 pct in March

ANKARA

Türkiye’s annual inflation slowed to 30.87 percent in March, down from 31.53 percent in February, official data showed on April 3.

“We are taking the necessary steps to limit the impact of geopolitical developments on our economy,” Finance Minister Mehmet Şimşek said, commenting on the inflation numbers.

“Leveraging the fiscal space we have created during the program period, we are swiftly and effectively implementing measures like a sliding scale [system for fuel prices] to reduce inflationary pressures,” he wrote on X.

“While these shocks may have short-term inflationary effects, we continue to implement our comprehensive and determined policy package to achieve our goal of sustained price stability,” Şimşek said.

The March figure came in below an Anadolu Agency’s survey forecast of 31.46 percent and was the lowest annual increase in consumer prices since December 2021, when inflation stood at 36.08 percent, according to the Turkish Statistical Institute (TÜİK).

Monthly inflation slowed to 1.94 percent in March from 2.96 percent in February, also coming in below the survey forecast of 2.4 percent.

On a yearly basis, the biggest price increases were in education at 51.97 percent, housing at 42.06 percent and transport at 34.35 percent.

The smallest increases were recorded in clothing and footwear at 7.2 percent, furnishings and household equipment at 20.2 percent and information and communication at 24.12 percent.

TÜİK said the main expenditure groups with the highest weight were food and non-alcoholic beverages, transport and housing. Annual inflation in these categories was 32.36 percent, 34.35 percent and 42.06 percent, respectively.

"The contributions of these main expenditure groups to the annual change were 8.25 percentage points for food and non-alcoholic beverages, 5.45 percentage points for transportation and 6.04 percentage points for housing, water, electricity, gas and other fuels," it said.

In March, food and non-alcoholic beverages prices rose 1.8 percent month-on-month, while alcoholic beverages and tobacco rose 4.36 percent. Clothing prices fell 2.1 percent compared to February and housing prices advanced 1.9 percent.

Transportation costs across Türkiye surged 4.5 percent and the monthly increase in hotel and restaurant prices was 1.17 percent, according to TÜİK data.

Following the release of March inflation data, attention will turn to the Central Bank, which is set to announce its interest rate decision on April 22.

The general expectation is that, due to uncertainties stemming from the war in Iran and inflationary risks triggered by the conflict, the bank will refrain from making any changes to its interest rates.

In March, the bank kept its policy interest rate, or one-week repo rate, unchanged at 37 percent.