Inflation in Turkey reached new record levels in May. Based on the data released, inflation reached 75.5% in May, down from just below 70% a month earlier. The monthly increase in prices also accelerated and reached 3.4%, surpassing economists’ forecasts.

Higher inflation is a result of strong rising prices in education, housing and restaurants, based on data from the Turkish Statistical Service.

According to a Reuters poll, economists expected that inflation would reach 74.8% in May, its highest level since November 2022, before falling to 42.6% by the end of 2024. Based on estimates by the same economists, monthly price increases between 2.7% and 3.3% was expected.

THE Turkish Finance Minister Mehmet Simsek he stated that “the worst is over” adding that he expects an improvement from this month. “The transition period to fight inflation is over and we are entering a deflationary process,” he said in a post on X.

THE central bank of Turkey has increased its key rate by 4,150 basis points since last June and pledged to further tighten policy if “there is a significant and persistent deterioration in the outlook.”

In March, the country’s central bank raised interest rates by 500 basis points, to 50%, citing a deterioration in the outlook for inflation, holding them unchanged since then.

The tightening of monetary policy marked a sharp reversal of years of monetary stimulus promoted by the country’s President, Tayyip Erdogan, aimed at boosting growth but sending inflation skyrocketing.