| 29 November 2023, Wednesday |

Turkish inflation dips to 50%

Turkish annual consumer price inflation dropped to 50.51 percent in March, official data showed on Monday, slightly below forecast and easing ahead of landmark presidential and parliamentary elections on May 14.


Inflation has been stoked by a currency crisis at end-2021 that pushed it to a 24-year peak above 85 percent in October, before dipping with a favorable base effect to 55.2 percent in February.


The surging prices have hit household earnings and hurt Turkish President Tayyip Erdogan’s popularity, making the May elections his biggest-ever political challenge.


The lira weakened slightly to 19.2020 against the dollar after the data, from 19.9600 beforehand. It has touched a series of record lows in recent days.


March consumer prices rose 2.29 percent from a month earlier, less than a predicted 2.85 percent in a Reuters poll.


Türkiye’s southeast region was hit almost two months ago by massive earthquakes which killed more than 50,000 people in Türkiye and left millions homeless. The earthquake is expected to cost Türkiye more than $100 billion and shave one to two percentage points off growth this year.


Last month, Türkiye’s central bank kept its policy rate steady after easing to 8.5 percent to support growth and employment in the wake of the disaster.


Turkish factory activity continued its expansion in March with improvements in new orders and output although February’s massive earthquakes continued to impact the sector.


The Purchasing Managers’ Index (PMI) for manufacturing rose to 50.9 last month from 50.1 in February, staying above the 50-point line that separates expansion from contraction, the Istanbul Chamber of Industry and S&P Global said.


The panel said that in some cases earthquake reconstruction efforts led to higher output.


New orders returned to growth for the first time in a year and a half, the survey showed, as business increased solidly over the month and export orders picked up the pace.


Despite the increase in production requirements, employment dipped for the first time in five months, for several reasons including the new early retirement law, the panel said.


Input costs and output prices rose sharply last month amid higher raw material costs, currency weakness, and increased wages, it also said.

  • Asharq Al-Awsat