Turkish inflation to jump near 70 percent in April

Turkey’s annual inflation rate is expected to rise to 68 percent in April and only dip to 52 percent by year-end due to the impact of the Russia-Ukraine conflict and rising commodity prices, a Reuters poll showed on Thursday.

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Turkey’s consumer price index has surged since last autumn as the lira weakened after the central bank in September embarked on a 500 basis point-easing cycle long sought by President Tayyip Erdogan.

The lira slide and rising food and energy prices pushed inflation to 61.14 percent in March, the highest in 20 years, despite tax cuts on basic goods and government subsidies for some electricity bills to ease the burden on household budgets.

The median estimate of 14 institutions in the Reuters poll for annual consumer price inflation in April was 68 percent, with forecasts ranging between 64.20 percent and 70.85 percent. Annual inflation last at such levels in February 2002, when it was 73.1 percent.

Economists see inflation remaining high for the rest of the year due to the Ukraine war, with the median estimate for inflation at year-end standing at 52 percent. Forecasts for the year-end figure ranged between 43.7 percent and 60 percent.

The government has said inflation will fall with the new economic program, which prioritizes low rates to boost production and exports and aims to achieve a current account surplus.

The Turkish central bank revised up its inflation forecasts for this year and next mainly because of the rise in commodity prices and supply issues. A presentation by Governor Sahap Kavcioglu on Thursday showed inflation peaking around 70 percent before June and falling to single digits by end-2024.

The central bank held its key policy rate steady at 14 percent in four meetings this year and said measures and policy steps will prioritize liraization in the market.

A unions confederation calculated that food prices increased by 8.02 percent in April in the capital Ankara.

Month-on-month, CPI was expected to stand at 6 percent, with forecasts ranging from 3.50 percent to 7.8 percent, according to the poll.

The Turkish Statistical Institute is scheduled to release April inflation data at 0700 GMT on May 5.

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