May figures show Turkish inflation on a downward trend: Erdogan
President Recep Tayyip Erdogan said on Sunday that inflation figures for May showed that rising consumer prices are on a downward trend.
Turkey’s annual inflation rate rose less than expected in May, but jumped to a 24-year high of 73.5%, boosted by higher food and energy prices.
Speaking to members of the ruling Justice and Development Party, Erdogan said the government is working on ways to ease the economic problems of families and combat high prices.
We never underestimate the problems our employees have in their daily lives. We are looking for ways to reduce the cost of living,” Erdogan noted.
He stressed that the government is closely following the course of prices and has been placed under the range of exorbitant increases.
Turkey’s CPI has risen since last fall as the Turkish lira weakened after the central bank in September embarked on a 500 basis point easing cycle.
Prices rose despite tax cuts on basic goods and government subsidies for utility bills to ease the burden on household budgets.
The government says inflation will fall under its New Economic Programme, which prioritizes low interest rates to boost production and exports to achieve a current account surplus.
In a presentation to members of the Justice and Development Party on Saturday, Minister of Treasury and Finance Noureddine Nabati said that fighting inflation is the top priority for the coming period.
Nabati stressed the importance of strengthening coordination and communication in combating price hikes, an effective monetary policy, and a wise approach in dealing with public finances, as well as comprehensive and effective implementation of macroprudential policies.
The Central Bank of Turkey (CBRT) has revised its inflation forecasts for this year and next mainly due to the rise in commodity prices and supply issues.
A presentation by Governor Şahib Kavcioglu in April indicated that inflation would peak around 70% before June before dropping to 42.8% by the end of the year.
The central bank kept its benchmark interest rate steady at 14% at five meetings this year, and said inflation would start due to other measures, the so-called base effect and the expected end to the conflict in Ukraine.
Nabati said that the main indicators showed that the economy maintained its positive outlook in the second quarter of the year.
Strong demand, manufacturing and exports helped Turkey achieve better-than-expected annual economic growth of 7.3% in the first quarter.