Official inflation in Turkey drops to 55.18%

Turkish annual inflation fell slightly to 55.18% in February, official data showed on Friday, following massive earthquakes that hit its southeast region and killed more than 45,000 people just under a month ago.

Compared to the previous month, consumer prices rose by 3.15%, the Turkish Statistical Office (TUIK) reported.

However, the official figures are disputed by independent economists at the Inflation Research Group (ENAG), who say consumer price inflation accelerated again in February, rising to 126.9% over 12 months from 121.6% a year earlier.

The strongest monthly price increase was recorded in the food and non-alcoholic beverages sector, with an increase of 7.36%, while the prices of education and restaurants and hotels increased by 5.69% and 4.07%, respectively.

TUIK said prices from the field were not collected from the earthquake-hit provinces of Gaziantep, Malatya and Hatay.

The index of domestic producer prices increased by 1.56% in February from the previous month, an annual increase of 76.61%

Inflation was fueled by a currency crisis in late 2021, reaching a 24-year high of 85.51% in October. The central bank cut its key interest rate despite rising inflation to maintain growth momentum, and made another 50 basis point cut after the earthquake.

Economists and government officials estimate that the earthquake, which damaged hundreds of thousands of buildings, will cost more than 50 billion liras and reduce the country's economic growth by one to two percentage points this year.

They predict that the earthquake will cause prices of goods and services, including food and housing, to jump, keeping inflation above 40% throughout the year.

President Tayyip Erdogan was already facing a major challenge on the economy with soaring inflation eating away at his popularity and the quake has added to the difficulties ahead of the presidential and parliamentary elections.