FX.co ★ Turkey's inflation tops 75%, but relief in sight

Turkey continues to struggle with sky-high inflation. According to the Turkish Statistical Institute (TUIK), the country’s annual inflation rate soared to 75.45% in May, a level not seen since 2022.

Although Turkey's inflation rate stood at 84.39% two years ago, the pace of consumer price growth in the country has accelerated significantly.

The sector with the highest annual price increases was education (up 104.8%). The housing sector also saw a steep rise in consumer prices (93.2%). Hotels, cafes, and restaurants surged by 92.9%. Prices for tobacco and alcoholic products inched up by 86.48%. On a monthly basis, inflation in Turkey came in at 3.37% in the last month of spring.

Turkish Finance Minister Mehmet Simsek said earlier that inflation would peak in May before easing thanks to reforms implemented by the government. He also predicted that inflation in the country would fall to single digits by 2026.

In an effort to combat inflation, the Turkish government also decided to suspend buying and leasing new buildings and vehicles for three years. This method would not be applied in the event of an earthquake threat, Simsek clarified. In all other cases, a standard would be set for the number of square meters allocated per civil servant.