Official data released on Wednesday shows a rise in inflation in Turkey to 64.77% on an annual basis in December, continuing the upward trend expected over the coming months after a significant increase in the minimum wage.
November's annual inflation rate was 61.98%.
On a monthly basis, inflation stood at 2.93%, according to the Turkish Statistical Institute, compared with about 3.28% in November.
In recent months, the monthly rate of inflation has been decreasing, coinciding with a policy of monetary tightening.
A Reuters poll predicted Turkey's annual inflation would hit 65.1% in December, with monthly inflation reaching 3.1%.
The increase was led by the prices in the hotel and restaurant sector over the past year, which recorded 93.2%, followed by the education sector at 82.1%.
Food and non-alcoholic beverage prices also rose by 72% during the year.
After years of easy monetary policy, Turkey's central bank reversed course in June last year, hiking interest rates by 3400 basis points to 42.5% to control inflation.
However, at the end of last year, the government increased the minimum wage for the new year by 49%, a rise larger than expected.
About 7 million people benefit from the minimum wage increase, which economists believe is likely to contribute to rising inflation rates in the forthcoming months.
Inflation increased after the currency crisis at the end of 2021, reaching its highest level in 24 years at 85.51% in October 2022. The Turkish lira depreciated by about 37% against the dollar last year.
Data also showed that the country's producer price index rose by 1.14% on a monthly basis in December and 44.22% on an annual basis.
Rise in Export Volume
President Recep Tayyip Erdogan said on Tuesday that his country's exports hit a record in 2023, rising by 0.6% compared to the previous year, reaching $255.809 billion.
He added, in a press conference, that he believes improvements in the current account balance will continue, with a decline in the trade deficit in November and December of the past year.
Trade Ministry data showed a 0.51% drop in Turkey's imports last year to $361.85 billion.
Turkey's trade deficit decreased by 3.2% annually to $106.04 billion in 2023, while in December alone, the deficit shrank by 37% to $6.1 billion compared with the same month of the previous year.
In turn, Turkish Trade Minister Mehmet Muş stated that the country aims to increase its exports to $267 billion in 2024 and to $302 billion in 2026.
He explained that the strong exporting performance contributed to an increase in the economic growth rate in the third quarter of last year by 5.9%, thereby maintaining its continuous quarterly growth for the 13th consecutive time.
