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Turkey's annual consumer price inflation reached 75.45%, slightly exceeding expectations In May, according to official data released on Monday.
This is anticipated to be the highest point before a series of interest rate hikes and relative stability of the lira bring some relief.
The increase in the consumer price index was primarily driven by significant rises in education, housing, and restaurant prices last month, as indicated by data from the Turkish Statistical Institute.
The data also showed that monthly inflation is expected to decrease after May, which stood at 3.37% compared to 3.18% in April. In April, the annual inflation rate was reported at 69.80%.
Finance Minister Mehmet Simsek expressed optimism, stating that "the worst is over" and relief will begin this month.
He also mentioned that "The transition period in the fight against inflation is completed, we are entering the disinflation process."
According to a Reuters poll, annual inflation was projected to peak at 74.8% in May, reaching its highest level since November 2022, before dropping to 42.6% by the end of 2024. Forecasts for month-on-month price increases ranged between 2.7% and 3.3%.
The central bank has increased its policy rate by 4,150 basis points since June last year and has pledged to tighten further if there is "a significant and persistent deterioration" in the outlook.
The last rate hike was in March, by 500 basis points to 50%, citing a deteriorating inflation outlook, and has maintained stability since then.
This tightening represents a significant shift from years of monetary stimulus advocated by President Tayyip Erdogan to stimulate growth, which led to a surge in inflation and triggered a long-term cost-of-living crisis for the people of Turkey.
As a result, the lira, which remained steady on Monday, has depreciated to 32.25 against the dollar from 5.7 five years ago.
Although it has declined by more than 8% this year, it has remained relatively stable since March, contributing to the expected relief in inflation.
"We're confident that inflation has now reached a peak but, with today's release containing a few unpleasant surprises, the pace of disinflation in the second half of the year is looking a bit uncertain,"
