Annual inflation ticks higher to 64.9 pct in January

ANKARA

Türkiye’s annual inflation rate increased from 64.77 percent in December last year to 64.86 percent in January, the data from the Turkish Statistical Institute (TÜİK) showed on Feb. 5

The month-on-month consumer price inflation, which has been declining since August last year reserved course last month, but this was widely anticipated.

The monthly inflation quickened from 2.9 percent in December to 6.7 percent in January, in line with market expectations.

“Monthly inflation increased due to temporary effects. We do not expect these effects to impact the main trend of inflation,” Finance Minister Mehmet Şimşek wrote on X, commenting on the latest numbers.

“We predict that starting from February, monthly inflation will decrease significantly and remain in line with our forecast path. We will see a significant decline in annual inflation in the second half of the year,” Şimşek said, adding that ensuring price stability.

The main objective and priority for the Central Bank is to achieve price stability, newly appointed Central Bank Governor Fatih Karahan said in a statement on Feb. 4.

Karahan was appointed the Central Bank governor to replace Hafize Gaye Erkan, who resigned on Feb. 2 after less than a year in the job.

“We are determined to maintain the necessary monetary tightness until inflation falls to levels consistent with our target… We stand ready to act in case of any deterioration in the inflation outlook,” Karahan, who had served as a deputy governor since July 2023, said in his statement.

Karahan will make his first public appearance later this week, when he will hold a briefing on the bank’s first Inflation Report of 2024 on Feb. 8 in the capital Ankara.

 Monthly price increases

Health prices surged 17.7 percent month-on-month in January, while the increase from December in restaurant and hotel prices was 12.2 percent, TÜİK reported on Feb. 5.

Housing costs were up 7.4 percent for an annualized increase of 46 percent. Food and non-alcoholic beverage prices rose 5.2 percent month-on-month and 69.7 percent annually.

Transportation costs were up 6.5 percent last month compared to December, but clothing prices declined by 1.6 percent.

In an effort to bring rampant inflation under control, the Central Bank has lifted its main policy rate by a cumulative 3,650 basis points since June last year.

Last month it lifted the one-week repo auction rate from 42.5 percent to 45 percent.

The bank’s next rate-setting meeting will take place on Feb. 22.