 reported.){kind=link}
Turkey’s official inflation data for March came in below expectations despite higher energy and raw material costs stemming from the Iran war, raising questions as to why the impact has not been reflected more clearly in consumer prices, Deutsche Welle (DW) reported.
Annual inflation slowed to 30.87 percent in March from 31.53 percent in February, while consumer prices rose 1.94 percent month on month, according to data from the Turkish Statistical Institute (TurkStat). The monthly reading was below market expectations of around 2.4 percent.
The data came after oil prices climbed amid the conflict that began on February 28 with US and Israeli strikes on Iran. Brent crude rose from about $72 per barrel before the war to $109 per barrel, a move that would typically lift prices in an energy-importing economy such as Turkey.
Kamil Yılmaz, a professor of economics at Koç University, told DW the March data were a surprise given successive increases in gasoline and diesel prices. He said higher energy and transport costs had not yet been reflected in areas such as housing, education, food and restaurants, and that the war’s effect on prices would likely become clearer in the coming months.
Hayri Kozanoğlu, a professor at Altınbaş University, told DW that weaker demand during a period of uncertainty may also have helped keep March inflation lower. He added that March is not usually a major adjustment month for sectors such as education, health and rent.
Kozanoğlu said authorities had tried to limit exchange-rate volatility after the war shock. He argued that around $40 billion in reserves had been used in the past month to prevent a sharper jump in the lira.
Alternative inflation measures pointed to stronger price increases. Independent researchers at the Inflation Research Group (ENAG), put monthly inflation at 4.10 percent and annual inflation at 54.62 percent in March.
Data from the İstanbul Chamber of Commerce (İTO), which tracks retail prices in the country’s largest city, also showed higher price growth, with its İstanbul consumer price index rising 2.97 percent on month and 40.44 percent on a 12-month average basis.
Turkey has faced persistent price pressure for years. Official data show annual consumer inflation has remained in double digits since 2019 and climbed above 75 percent in May 2024 before starting to fall.
Inflation remains one of the main economic issues facing the government of President Recep Tayyip Erdoğan after years of a high cost of living and currency weakness.
Turkey’s central bank said in February that it kept its yearend 2026 inflation target at 16 percent, even as it raised its forecast range to between 15 and 21 percent.