Annual inflation rate jumps to 75.45 percent in May

ANKARA

The annual inflation rate has accelerated from 69.8 percent in April to 75.45 percent in May, data from the Turkish Statistical Institute (TÜİK) showed on June 3.

Consumer prices rose by 3.37 percent last month after increasing 3.18 percent in April.

“The worst is over!… The transition period in the fight against inflation is completed and we are entering disinflation,” Finance Minister Mehmet Şimşek wrote on X, commenting on the latest inflation figures.

“We saw the peak in annual inflation, which includes the cumulative effects of the past 12 months. The permanent decline in inflation will begin in June. Annual inflation will most likely fall below 50 percent by the end of the third quarter,” Şimşek said.

Inflation expectations will converge closer to the targets in the coming period, he added.

Last month, the Central Bank raised the inflation forecast for the end of 2024 to 38 percent, up from a previous estimate of 36 percent. It kept inflation forecasts for 2025 and 2026 unchanged at 14 percent and 9 percent, respectively. The bank said it expected inflation to stabilize at 5 percent in the medium term.

“We are determined to achieve our goal… Our support to the disinflation process will continue to increase by strengthening fiscal discipline,” said Şimşek.

Şimşek in May announced a three-year austerity plan aimed at reducing public spending to help tame inflation.

Clothing prices advanced 9.6 percent in May from April, bringing the annual increase for this item to 50.8 percent, while monthly and annual increases in housing prices were 7.1 percent and 93.2 percent, respectively, according to the TÜİK data.

Food and non-alcoholic beverage prices were up 4.74 percent in May compared with April and the annual increase was 70 percent.

Restaurant and hotel prices rose 5.5 percent monthly and 92.9 percent annually in May.

The monthly increase in transportation costs was milder at 1 percent, while the year-on-year increase came in at 79 percent.

The major core inflation indicators deteriorated in May, according to the TÜİK data.

The C-index, which excludes excluding energy, food and non-alcoholic beverages, alcoholic beverages, tobacco products and gold prices, rose 3.76 percent month-on-month in May after increasing 3.56 percent in April.

The monthly increase in the B-index, which excludes unprocessed food, energy, alcoholic beverages, tobacco and gold, quickened from 3.24 percent to 3.77 percent.

The A-index, which excludes seasonal products, advanced 3.29 percent last month, after rising 3.21 percent in April.