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Turkey Inflation March 2023

Turkey: Inflation drops to lowest level since January 2022 in March

Inflation dropped to 50.5% in March, following February’s 55.2%. March’s reading marked the lowest inflation rate since January 2022 and came slightly below market expectations. The slowdown was chiefly driven by base effects, with prices for food and non-alcoholic beverages, transport, and restaurants and hotels growing at a more subdued pace.

In addition, the trend pointed down, with annual average inflation coming in at 70.2% in March (February: 71.8%). Meanwhile, core inflation fell to 47.4% in March, from February’s 50.6%.

Lastly, consumer prices rose 2.29% in March over the previous month, which was below February’s 3.15% increase.

Clemens Grafe and Basak Edizgil, analysts at Golman Sachs, commented on the outlook:

“We forecast inflation to fall to the lower 40s around the time of elections and prove sticky in the second half of the year. Considering the rising BoP pressures on reserves and the Lira, a sudden and significant currency depreciation amid heightened uncertainty poses the largest upside risk to our forecast in April-May.”

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