In a significant development for Turkey's economy, the country's annual inflation rate has fallen below the 40 percent mark for the first time in 16 months. Official data released on Monday indicates that consumer prices recorded a 39.6 percent increase on a yearly basis, remaining nearly stable at 0.04 percent compared to the previous month. However, the credibility of these figures has been called into question by independent economists associated with Turkey's Inflation Research Group (ENAG).
ENAG economists assert that the actual annual inflation rate hovers between 105 and 109 percent, depending on whether the temporary offer of free gas to households is taken into account. These conflicting viewpoints have created a discrepancy, casting doubt on the accuracy of the official figures.
This latest inflation report marks the first release since President Recep Tayyip Erdogan's re-election on May 28. President Erdogan, commencing his third term in office, has identified combating inflation as a paramount objective. The country has experienced a tumultuous inflationary period, with rates surpassing 85 percent in the autumn of 2022 before gradually decelerating from November onwards.
While it is evident that prices are continuing to rise on a monthly basis, the pace of increase has slowed compared to the previous year. The latest data suggests a moderation in the rate of inflation, offering a glimmer of hope for Turkey's economic prospects. However, the contrasting assessments of inflation by the official statistics agency and independent economists add an element of uncertainty to the situation, necessitating further analysis and investigation.
