Annual inflation in Turkey jumped to 73.5%

According to the Turkish Statistical Institute Turkstat, consumer prices in the country in May soared by 73.5% in annual terms after an increase of 69.97% in April. This growth was the highest since October 1998. 

Analysts on average predicted May inflation at 74%. In monthly terms, consumer price growth slowed more than twice, from 7.25% in April to 3% in May.

Meanwhile, the Turkish stock index Borsa Istanbul 100 today updated its historical maximum, reaching 2,619 points. Since the beginning of the year, the Turkish stock market has soared by 40.6% amid demand from local investors for assets that can protect them from hyperinflation.

Experts expect that inflation in Turkey will remain at 70% until the end of the year. It is noted that many factors, including a comprehensive deterioration in price dynamics, a high inflationary trend and an increase in the exchange rate, indicate that inflation will be stronger than the Turkish central bank expects.

Last year, the Central Bank of Turkey cut the rate several times, which led to a sharp depreciation of the lira and negatively affected the country's financial system. Then annual inflation accelerated to 36%. The regulator keeps the discount rate unchanged this year – at the level of 14%.