Turkey annual inflation dips to 55.18% in February

ISTANBUL, March 3 (Reuters) – Turkey’s annual inflation fell slightly to 55.18% in February, official data showed on Friday, below forecasts, after a major earthquake hit the southeastern region and killed more than 45,000 people last month.

On a monthly basis, consumer prices rose 3.15%, the Turkish Statistics Institute said, lower than a Reuters poll forecast of 3.4%. Every year, consumer price inflation estimated to be 55.5%.

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

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

The domestic producer price index rose 1.56% month-on-month in February for an annual increase of 76.61%

The lira traded at 18.8920 after the data, unchanged from Friday’s close. The currency has been largely flat since the summer due to country management.

Inflation has been fueled by the currency crisis at the end of 2021 and reached a 24-year peak of 85.51% in October. The central bank cut policy rates even as inflation rose to maintain growth momentum and added a 50-basis-point cut after the earthquake.

Economists and government officials expect the earthquake, which destroyed hundreds of thousands of buildings, cost more than $50 billion liras and shave one to two percentage points from the country’s economic growth this year.