Turkey’s Inflation Slows to 42.1% in January

Turkey’s annual inflation rate eased for the eighth consecutive month in January, dropping to 42.1% from 44.3% in December, according to official data from the Turkish Statistical Institute (TUIK) released on Monday.

Despite this decline, monthly inflation surged to 5% in January, a sharp rise from the 1% recorded the previous month. Analysts attribute this spike to the 30% increase in Turkey’s net minimum wage, which rose to 22,104 lira ($600) at the start of the year.

Turkey has been grappling with double-digit inflation since 2019, driving up the cost of essentials such as education, housing, healthcare, and dining. Inflation reached a peak of 75% in May 2024 before beginning to decline in June.

In response to inflationary pressures, Turkey’s central bank cut its key interest rate from 50% to 45% on January 23, citing progress in its inflation control efforts.

However, independent economists from the ENAG group challenge the official figures, estimating January’s year-on-year inflation at 81%, significantly higher than the government’s report.