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Turkish inflation jumps 3.9% in June on weaker currency

REUTERS/Dilara Senkaya
Mirza Ozbag, a vendor, waits for customers at his stall at a fresh market in Istanbul on July 5, 2023

Turkish monthly inflation jumped 3.92 percent in June, still less than expected, as it was stoked by a plunge in the lira currency after the re-election of President Tayyip Erdogan, official data showed on Wednesday.

The median of estimate in a Reuters poll predicted inflation would climb 4.84 percent month-on-month.

Annual inflation dipped a bit more than expected to 38.21 percent, compared with a poll forecast of 39.47 percent, due in part to so-called base effects from the previous year.

Inflation has soared since a currency crisis at the end of 2021 and touched a 24-year peak of 85.51 percent last October.

The lira lost some 30 percent of its value so far this year – and more than 20 percent in June alone – after Erdogan signalled a U-turn toward more orthodox economic policies including rate hikes. He won re-election in late May.

The domestic producer price index was up 6.50 percent month-on-month in June for an annual rise of 40.42 percent, according to the data from the Turkish Statistical Institute.