Türkiye’s inflation is expected to have eased further in February, although prices continue to rise on a monthly basis, driven by higher prices of food and services.
The annual consumer price index (CPI) fell sharply in December and eased to 57.7% in January, down from the peak of 85.5% – a 24-year high – registered last October.
Data on Friday is forecast to show inflation dropped to 55.5% in February, according to the median estimate of 14 economists in a Reuters poll unveiled on Monday. Forecasts ranged between 54% and 56.8%.
A survey of 17 institutions by the private broadcaster Bloomberg HT sees the annual inflation at 55.3%, with estimates ranging between 54.21% and 57.5%.
On a monthly basis, the median estimate in the Reuters poll was 3.4%, in a range of 2.3% to 4.2%, mainly due to higher food prices and price hikes in education, communication and the health sector, economists said.
Türkiye’s southeast region was hit by massive earthquakes earlier this month, killing more than 44,000 people and leaving millions homeless. Business groups and economists have said the quake could cost Türkiye up to $100 billion and shave one to two percentage points off growth this year.
Government officials and economists have also said prices of goods and services, including food and housing, will fall in coming months by far less than previously expected due to disruptions caused by the quakes.
The government has prioritized low-interest rates to boost exports, production, and investment and create new jobs as part of a new economic program. Dubbed the Türkiye Economy Model, the program aims to lower inflation by flipping the country’s chronic current account deficit to a surplus.
Last week, Türkiye’s central bank lowered its policy rate by 50 basis points to 8.5% to support growth after the earthquake and said it would monitor the economic impact of the disaster.
The median estimate for inflation at year-end stood at 45% in the Reuters poll, with forecasts coming in between 34% and 51.7%. The median in a survey conducted before the earthquakes in January stood at 41% for the end of 2023.
Before the earthquakes, inflation had been expected to keep falling to around 35-40% by June. However, it is now seen to be about 44% in May, heading into presidential and parliamentary elections, scheduled by June 18, according to the median forecast of six economists who gave estimates to the Reuters poll.