CYPRUS MIRROR
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Turkey's Annual Inflation Eases to 38.1 Percent, Lowest Since December 2021

Turkey's Annual Inflation Eases to 38.1 Percent, Lowest Since December 2021

The annual inflation rate slowed for a 10th consecutive month in March, falling to 38.1 percent, the lowest since December 2021, data from the Turkish Statistical Institute (TÜİK) showed on April 3.

Publish Date: 03/04/25 13:19
reading time: 3 min.
Turkey's Annual Inflation Eases to 38.1 Percent, Lowest Since December 2021
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On a month-on-month basis, the consumer price index rose 2.48 percent in March, accelerated from a 2.27 percent hike recorded in the prior month.

Headline inflation dropped from 39.05 percent in February, while economists polled by state-run Anadolu Agency had estimated inflation to come in at 38.66 percent.

Energy prices surged by 41.98 percent at an annualized pace in March, eased from 43.92 percent in February.

Food and non-alcoholic beverage prices increased 37.12 percent, compared to February's 35.11 percent.

Last month food prices advanced 4.94 percent from February, TÜİK data showed.

Housing prices rose by 2.1 percent month-on-month for an annualized increase of 68.6 percent, while transport costs were up by 0.25 monthly and 21.6 percent annually.

Prices at restaurants and hotels in the country increased by 2.15 percent in March, which brought the annual rise to 43.4 percent.

Eyes have been on economic management and the Central Bank since domestic political events triggered volatility in the local FX market and the stock exchange.

In response to the market volatility, the bank’s Monetary Policy Committee (MPC) held an interim meeting on March 20, where it increased its overnight lending rate from 44 percent to 46 percent while keeping the policy rate at 42.5 percent.

In addition, the bank suspended one-week repo auctions “for a while.”

Speaking at an event in Istanbul at the end of March, Central Bank Governor Fatih Karahan reiterated that they will maintain a tight monetary policy stance until a permanent fall in inflation and price stability is achieved.

Two important factors will be decisive in March and April, Karahan said.

“One of these is the impact of Ramadan on food prices and the other is the reflection of recent developments in financial markets on prices and expectations. These factors increased the upside risks in inflation, especially for April,” he explained.

In a research note on March 27, Goldman Sachs said it expected the Central Bank to raise its policy rate at the April 17 meeting or before by 350 basis points to show its ability and willingness to implement its disinflation program.

 

Source: HDN 

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