Turkiye's Inflation Nears 65 Percent in January

The Turkish Statistical Institute said monthly inflation increased 6.7 percent in January, the highest since August 2023, due to a large increase in the minimum wage and new-year price adjustments.

Turkish Treasury and Finance Minister Mehmet Simsek said Monday on social media platform X that the monthly inflation in January increased because of temporary effects.

"We do not expect these effects, which were largely reflected in inflation in January, to affect the main trend of inflation. We predict that monthly inflation will decrease significantly starting from February and will remain in line with our forecast path," he said.

Simsek said Turkey will see a "significant decline" in annual inflation in the second half of the year, adding "ensuring price stability is our main priority."

Inflation topped 85 percent in October 2022 and remains above 60 percent, inflicting hardship on consumers in Turkiye. The high inflation, coupled with the depreciation of the Turkish lira, has squeezed the incomes of millions of workers and pensioners, who are struggling to make ends meet.

The country shifted from ultra-loose monetary policy to fiscal orthodoxy this year, with a new financial team led by Simsek taking the helm early last summer.

Aggressive interest rate hikes since June 2023 have sent the policy rate soaring from 8.5% to 45%, offering a glimmer of hope for the country to rein in the rampaging inflation.

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