Turkey’s inflation rises to 64.86% in January

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Turkey’s annual inflation rate reached 64.86 percent in January and increased 6.7 percent month on month, as the country’s new central bank governor pledged to ensure disinflation.

Hotels, cafes and restaurants saw the highest annual increase of 92.27 percent, followed by health (78.57 percent) and education (79.81 percent), the latest data from the Turkish Statistical Institute showed.

Clothing and footwear saw the lowest annual increase of 40.62 percent.

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In January, the health segment saw the highest monthly increase of 17.68 percent, followed by hotels, cafes and restaurants, rising 12.17 percent.

Annual inflation stood at 64.88 percent in December 2023.

Earlier this week, the country’s first female central bank governor, Hafize Gaye Erkan, resigned, citing personal reasons. Fatih Karahan was named her replacement, who plans to continue with the policies to ensure disinflation.

Last month, Turkey’s central bank raised its benchmark one-week policy rate by another 250 basis points to 45 percent, continuing with its aggressive monetary tightening policy.

The central bank said it had reached a sufficient level to ensure disinflation, signalling a halt.

Turkey’s central bank has lifted its key rate by 3,400 basis points (bps) since June 2023, including a hike of 250 bps to 42.5 percent in December 2023.

In December, Turkey’s treasury and finance minister, Mehmet Simsek, said that he hoped annual inflation would drop to single digits by the end of 2026.

Inflation is expected to drop to 36 percent this year and 14 percent in 2025, he said in his speech at the Turkuvaz Media Center in Istanbul.