If the state needs funds and has limited borrowing possibilities, it often resorts to printing money. Then inflation results and the economy has a problem, including the state budget itself. However, you can operate in this way even for a longer period of time, even achieving economic growth. However, the situation of rapid price changes is not good investment conditions for private ventures, and without private investment, growth is illusory.
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Türkiye is in such a situation and is struggling, but very slowly, to get out of the areas of hyperinflation towards ordinary inflation. On Friday, the local statistical office, TurkStat, announced that the annual price increase amounted to 30.87 percent in March. A month earlier it was 31.53%, with the lower level previously seen in November 2021.
Inflation in Turkey
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https://pl.investing.com/
Although such a result would be a disaster for Poland, in the case of Turkey it is already a small success. All the more so because economists expected a reading of 31.40%, which is much higher. In the last six months, they were wrong as many as five times, which shows how uncertain they are about the effectiveness of the government and central bank's policies.
Compared to February, inflation was 1.94%. A year ago it was 2.46 percent, and two years ago 3.16 percent.
More expensive food is the biggest problem
The greatest impact on the total annual inflation rate has food, i.e. theoretically prices on which the central bank has less influence through its policy, because they are also determined by weather conditions and international conditions. Food and beverage prices increased by as much as 32.4%. y/y, which added +8.25 percentage points to the general inflation rate.
In second place were those growing by as much as 42.06%. YOY housing costs. Gas prices increased, as did the prices of electricity and water, and their prices increased the inflation rate by 6.04 percentage points.
Third place was taken by transport, mainly fuel prices, with an increase of 34.35%. rdr. Although Turkey has the cheapest (lower taxed) fuels in Europe, maybe apart from Russia and Belarus, the increase in their prices as a result of the US-Israel attack on Iran has had an impact on Turkish pockets. Transport added as much as 5.45 percentage points. to the general inflation rate.
Türkiye inflation by groups of goods and services. Left column – year-to-year price growth, right column – impact on overall inflation in percentage points.
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Turkstat
