by Burak Akinci
ANKARA, May 6 (Xinhua) -- Türkiye's annual inflation eased for the 11th consecutive month to 37.86 percent in April, down from 38.1 percent in March, official data showed Monday.
However, experts have warned that persistent price pressures domestically and global uncertainties are threatening the country's progress toward meeting the year-end inflation target of 24 percent.
April's monthly consumer price rise accelerated to 3 percent from 2.46 percent in March, signaling ongoing economic strain. Meanwhile, the Turkish lira weakened by more than 12 percent against the U.S. dollar in the first quarter, amplifying imported inflation.
Analysts have attributed the contrast between decelerating annual inflation and rising monthly costs partly to a base effect, meaning inflation can look lower depending on last year's prices, which hovered at around 75 percent in April 2024.
"The base effect helped slightly in April, but the underlying trend remains challenging as disinflation is slowing," Istanbul-based economist Atilla Yesilada told Xinhua.
"Monthly price increases continue to be strong, and global uncertainties aren't making it any easier," Yesilada said, noting that global uncertainties fueled by U.S. tariffs are complicating Türkiye's disinflation path.
Türkiye has been grappling with rising inflation for years, with the country's annual inflation hitting 64.7 percent in December 2023. From June 2023 to March 2024, the central bank raised its key interest rate from 8.5 percent to 50 percent to tighten monetary policy before stepping into an easing cycle at the end of 2024, supported by improving inflation indicators.
However, to curb volatility, the central bank reversed its easing cycle in April, raising its key interest rate by 350 points to 46 percent. The central bank's chief Fatih Karahan has vowed to maintain tight policies until inflation stabilizes.
The full effects of April's rate hike are yet to be seen, Yesilada said. "Monetary policy works with a lag. May could still bring elevated figures, but if the current stance is held, we might see clearer signs of easing in the second half of the year."
"The central bank's stance is firm, which is necessary," Istanbul-based economist Mustafa Sonmez told Xinhua.
Yet businesses are feeling the squeeze of the tight policies. Many small- and medium-sized businesses rely on credit to finance operations, purchase inventory, or invest in growth, and high rates have discouraged borrowing, making it expensive and even unaffordable for those businesses.
"With interest rates this high, we're not talking about expansion anymore, just survival," said Seyit Ardic, head of the Ankara Chamber of Industry, urging policymakers to return to short-term monetary easing.
While the World Bank recently upgraded Türkiye's 2025 growth forecast from 2.6 percent to 3.1 percent citing improved macroeconomic management, experts believed that recovery remains fragile, doubting quick fixes to inflation.
"Global instability and domestic cost factors make it hard to see inflation dropping to 24 percent this year. A more realistic figure is around 30 percent," Sonmez said.
"Global risks and the weight of past difficulties mean Türkiye's inflation story is far from over," Sonmez added.
Rating agency S&P has set the year-end inflation forecast at 33 percent, while Dutch multinational banking and financial services corporation ING said Monday in a note to investors that Türkiye's central bank may soon revise its year-end inflation outlook slightly upward "due to recent developments."
"Some may be hoping for a miracle, but miracles aren't real," Türkiye's Treasury and Finance Minister Mehmet Simsek told private broadcaster TGRT Haber on Monday. ■
