Turkey’s Inflation Begins to Ease A Look at the Path Ahead
Consumer prices began slowing after reaching a peak of 75.45 percent in May.
“The disinflation process has begun,” Finance Minister Mehmet Simsek wrote on X.
Turkey has been battling a cost-of-living crisis that prompted President Recep Tayyip Erdogan to drop his opposition to interest-rate hikes to combat inflation.
The central bank began to raise its key rate in June 2023, gradually taking it from 8.5 percent to 50 percent.
Erdogan this week said: “We will all see the fever of inflation decrease in the coming months.”
The staggering rise of consumer prices and the collapse of the Turkish lira are deemed responsible for the severe electoral setback inflicted on Erdogan’s AKP party in the March municipal elections.
William Jackson, chief emerging markets economist at London-based Capital Economics, said the larger-than-expected decline in Turkish inflation in June marked the start of a new phase of the disinflation process.
In a note to clients, he predicted much steeper falls in July and August.
“Still, it’s likely to be a bumpy path down, with inflation unlikely to drop below 40 percent until 2025,” he wrote.
Mutib Khalid is a skilled content writer and digital marketer with a knack for crafting compelling narratives and optimizing digital strategies. Excel in creating engaging content that drives results and enhances online presence. Passionate about blending creativity with data-driven approaches, Mutib Khalid helps brands connect with their audience and achieve their goals.
