Inflation in Türkiye rose to 68.5% during March

Official data showed on Wednesday that the annual inflation rate in Turkey rose to 68.5% in March, which is slightly lower than expectations after President Recep Tayyip Erdogan’s party suffered heavy losses in the local elections, due to reasons including the high cost of living.

According to Reuters, the Turkish Statistical Institute said that inflation on a monthly basis reached 3.16 percent, down from 4.53 percent in February and 6.7 percent in January, mainly due to the decline in the impact of salary adjustments and higher prices in the beginning of the year.

A Reuters poll showed that annual inflation is expected to rise to 69.1% in March, a monthly increase of 3.5%. The annual rate is expected to decrease to 43.75% by the end of 2024.

Erdogan’s Justice and Development Party lost control of several regions and suffered a crushing defeat to the main opposition in the major cities of Istanbul and Ankara on Sunday, in its worst electoral performance in more than two decades.

Analysts said voters punished him largely because of a years-long cost-of-living crisis.

The central bank, part of a strong monetary tightening cycle since June, surprised analysts when it raised its benchmark interest rate by another 500 basis points last month due to what it called deteriorating inflation expectations.

Shortly after the data was released, Finance Minister Mehmet Simsek said the recent monetary and fiscal tightening would help stabilize inflation expectations and support an inflation slowdown.

“We will do everything required to achieve our goal of price stability, which is our main priority,” he said on the X social media platform.