Türkiye Inflation Hits 75% in Expected Peak Before Relief

A view of produce for sale at a store in Istanbul, Türkiye, May 29, 2023. REUTERS/Hannah McKay/File Photo Purchase Licensing Rights
A view of produce for sale at a store in Istanbul, Türkiye, May 29, 2023. REUTERS/Hannah McKay/File Photo Purchase Licensing Rights
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Türkiye Inflation Hits 75% in Expected Peak Before Relief

A view of produce for sale at a store in Istanbul, Türkiye, May 29, 2023. REUTERS/Hannah McKay/File Photo Purchase Licensing Rights
A view of produce for sale at a store in Istanbul, Türkiye, May 29, 2023. REUTERS/Hannah McKay/File Photo Purchase Licensing Rights

Turkish annual consumer price inflation reached 75.45% in May, a bit above expectations, official data showed on Monday, in what is expected to be the high watermark before a series of rate hikes and relative lira stability bring relief.

The consumer price index rise was driven by strong advances in education, housing and restaurant prices last month, Turkish Statistical Institute data showed.

Monthly inflation is also expected to ease after May, when it was 3.37%, compared with 3.18% in April, the data showed. Annual inflation in April was 69.80%, Reuters reported.

Finance Minister Mehmet Simsek said "the worst is over" and relief will begin this month. "The transition period in the fight against inflation is completed, we are entering the disinflation process," he said on X.

In a Reuters poll, annual inflation had been forecast to peak at 74.8% in May, its highest level since November 2022, before dropping to 42.6% by the end of 2024. Forecasts for month-on-month price rises ranged between 2.7% and 3.3%.

The central bank has raised its policy rate (TRINT=ECI), opens new tab by 4,150 basis points since June last year and vowed to tighten more if there is "a significant and persistent deterioration" in the outlook.

It last raised rates in March, by 500 basis points to 50%, citing a worsening inflation outlook, and has since held steady.

The tightening marked a dramatic reversal of years of monetary stimulus that was championed by President Tayyip Erdogan to boost growth, but which sent inflation soaring and sparked a years-long cost-of-living crisis for Turks.

As a result the lira , steady on Monday, has skidded to 32.25 to the dollar from 5.7 five years ago. It is down more than 8% this year but held mostly steady since March, helping underpin the expected inflation relief.

"We're confident that inflation has now reached a peak but, with today's release containing a few unpleasant surprises, the pace of disinflation in the second half of the year is looking a bit more uncertain," Capital Economics said in a nod to the higher-than-expected print.

The domestic producer price index was up 1.96% month-on-month in May for an annual rise of 57.68%, the data showed.

The policy reversal has drawn foreign investor interest and helped boost the central bank's foreign reserves, which are at the highest level since December on a net basis.

International investors are ramping up exposure to Turkish local bonds and credit default swaps. JPMorgan said it had moved its allocation to Turkish domestic government bonds to "overweight", citing increasing confidence in the policy.

Last month, the central bank nudged up its year-end inflation forecast to 38% and said it would "do whatever it takes" to avoid any longer-term deterioration in the outlook.



Saudi ROSHN Group Reveals Rebranding

A ROSHN project in Saudi Arabia (ROSHN website)
A ROSHN project in Saudi Arabia (ROSHN website)
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Saudi ROSHN Group Reveals Rebranding

A ROSHN project in Saudi Arabia (ROSHN website)
A ROSHN project in Saudi Arabia (ROSHN website)

ROSHN Group, a pioneering real estate developer backed by Saudi Arabia’s Public Investment Fund, has introduced on Sunday a new identity and strategic focus that expands its remit to include asset classes beyond its core residential offering.
This transformation into a multi-asset developer cements ROSHN's status as a trailblazer in the real estate sector and sets the stage for an innovative approach to developing mixed-use projects and multi-asset destinations, the Group said in a statement.
It said the launch of ROSHN Group’s fresh visual identity signifies a milestone in its commitment to broadening its real estate portfolio and establishing integrated destinations that cater to society’s diverse needs.
The new portfolio will encompass ROSHN’s core asset classes of 200 million square meters of residential property, alongside over four million square meters of gross leasable area across retail, commercial, and hospitality sectors.
Its enabling assets will include education, mosques, and healthcare, while opportunity assets span transport and logistics, including warehouses, industrial parks, and knowledge hubs, as well as leisure and entertainment, ranging from entertainment centers to fitness hubs.
These projects will showcase an exceptional diversity of assets, creating investment opportunities, elevating living standards, and driving economic growth, the Group said.
“Our growing portfolio now seamlessly integrates forward-thinking amenities and elevated connectivity, fostering opportunities for commercial partnerships, job creation, investment, and economic growth in alignment with Saudi Vision 2030,” said Chief Marketing and Communication Officer Ghada Al Rumayan of ROSHN Group.
She added, “With our own evolution, this vision becomes even more tangible as we introduce our expanded approach and dedication to improving quality of life through iconic new destinations across the Kingdom.”
Al Rumayan said that ROSHN takes pride in its role as a leading real estate developer in the Kingdom with a vision to transform urban living.