Turkish inflation falls to 71.6 percent in June: official data

ISTANBUL: Turkey’s annual inflation rate fell to 71.6 percent in June, the first in several months, official data showed Wednesday.

Consumer prices began slowing after reaching a peak of 75.45 percent in May.

“The disinflation process has begun,” Finance Minister Mehmet Simsek wrote on X.

Turkey has been battling a cost-of-living crisis that prompted President Recep Tayyip Erdogan to drop his opposition to interest-rate hikes to combat inflation.

The central bank began to raise its key rate in June 2023, gradually taking it from 8.5 percent to 50 percent.

Erdogan this week said: “We will all see the fever of inflation decrease in the coming months.”

The staggering rise of consumer prices and the collapse of the Turkish lira are deemed responsible for the severe electoral setback inflicted on Erdogan’s AKP party in March municipal elections.

William Jackson, chief emerging markets economist at London-based Capital Economics, said the larger-than-expected decline in Turkish inflation in June marked the start of a new phase of the disinflation process.

In a note to clients, he predicted much steeper falls in July and August.

“Still, it’s likely to be a bumpy path down, with inflation unlikely to drop below 40 percent until 2025,” he wrote.