Sharp slowdown in annual inflation in Turkey in December

Official data showed on Tuesday that inflation in Turkey eased to 64.27% year-on-year in December from 84.39% in November after hitting a 24-year high of 85.51% in October.

And according to the Turkish Statistical Institute, last month’s inflation was the lowest year-on-year since April, while the consumer price index rose 1.18% month-on-month, the lowest in 16 months (in September 2021, it was at 1.25% level.

The domestic producer price index fell 0.24% m/m in December but rose 97.72% y/y.

According to the Turkish Statistical Institute, over the past 12 months, the average consumer price has increased by 72.31%, and domestic producer prices by 128.47%.

Analysts attribute the sharp decline to the so-called base effect, which makes year-on-year price increases seem smaller than the very high rates recorded 12 months ago.

The December figures are in line with Turkish President Recep Tayyip Erdogan’s election pledge that inflation would start to ease early in the year after hitting its highest level since 1998 last year.

Turkey’s recent economic crisis erupted when Erdogan, who has long opposed high interest rates, pressured the central bank to contain rising consumer prices by lowering borrowing costs.

Source: Anatolia + AFP