Turkey’s annual consumer inflation jumped to a new two-decade high of 61.1% in March from 54.4% the previous month as prices rose nearly 5.5% in March alone, fueled by the commodity shock of Russia’s invasion of Ukraine.

Producer prices, meanwhile, rose by about 9.2% in March, bringing annual producer inflation to nearly 115%, according to data released Monday by the Turkish Statistical Institute.

Standing out in the consumer inflation is the transport group, where prices rose more than 13% in March. Fuel prices, in particular, saw a string of almost daily hikes as a result of global oil price increases last month. The price of diesel, for instance, rose by an unprecedented 32% over a month. And with the added impact of price increases in the import-reliant automobile category, the transport group became the leading driver of inflation in March.

In the food group, which is assigned a 25.3% weight in the consumer inflation index, prices rose 4.7% in March, stoked by problems in the supply of a number of imported goods such as sunflower oil due to the war in Ukraine. Annual food inflation topped 70%.

In the services group, prices rose some 4.2% in March.

The impact of the global economic fallout from Russia’s invasion of Ukraine was, no doubt, significant in fanning inflation in Turkey and is expected to continue to do so in the coming months. It comes atop domestic factors that were already stoking inflation. The controversial economic policies of President Recep Tayyip Erdogan’s government have made the Turkish economy more fragile and food inflation, in particular, has become unrestrainable amid Ankara’s failure to address long-running problems in the agricultural sector. Moreover, the government has prioritized encouraging growth over fighting inflation ahead of presidential and parliamentary elections scheduled for June 2023.

Read more: https://www.al-monitor.com/originals/2022/04/turkey-inflation-hits-61-fallout-ukraine-war-continues#ixzz7RipZrfUB

Written by Mustafa Sönmez