Turkish inflation rises to 61.53% in September, near forecast

Reuters

Published Oct 03, 2023 03:12AM ET

Updated Oct 03, 2023 03:25AM ET

ISTANBUL (Reuters) -Turkish annual consumer price inflation climbed to 61.53% in September, official data showed on Tuesday, just below expectations and rising for a third consecutive month in response to recent tax hikes and lira weakness.

Month-on-month, consumer price inflation was 4.75%. In a Reuters poll, annual inflation was expected to rise to %61.7.

Inflation soared above 85% last year after an aggressive rate-cutting cycle sparked a historic currency crash in late 2021. But after winning May elections, President Tayyip Erdogan reversed course and named a new economic team to embrace more orthodox policies including aggressive monetary tightening.

The lira, under less state control, has fallen some 26% since the vote and was 0.2% weaker on the day at 27.5005 to the dollar. Inflation is seen climbing to about 70% by year end and reaching 75% around May of next year before cooling, economists and the government say.

Last month the central bank raised its key interest rate by 500 basis points to 30%, tightening policy for four straight months. Since the June policy U-turn, it has hiked rates by 2,150 basis points to rein in inflation.

Following the change in policy, S&P Global Ratings revised its outlook on Turkey to "stable" from "negative" last week, citing moves to cool an overheated economy and stabilize the exchange rate.