Turkey's May Inflation Rate Dips: The Lowest Since Last Year, Yet Debate Rages On
Lowest inflation rate recorded since May 2021 confirmed.
Venture into the world of social media, and you'll find chatter about Turkey'sMayinflation rate hitting a low not seen since 2021. But, here's the catch—some economists doubt the official numbers.
According to data released byTurkStaton Tuesday, consumer prices increased by 35.4% in May. Prices rose by a mere 1.5% compared to April, a notable reduction. However, what's troubling is the disparity between these figures and those reported by the research group, Enag, which estimates May's inflation rate to be a whopping 71.2%.
This isn't the first time we've witnessed a divide. For years now, the official inflation rate has lingered in the double-digit percentage range. It peaked at an astounding 85% at the end of 2022. The Turkey Central Bank only began to hike interest rates to combat inflation last year. But, in the past, President Recep Tayyip Erdogan had rejected a tighter monetary policy despite high inflation rates, bucking conventional wisdom.
So, where does the disconnect lie? Let's break it down:
Disagreement at the Core
1. Different Methodologies- Official Data: The Turkish Statistical Institute (TÜİK) employs a standardized methodology to calculate inflation, focusing on a basket of goods and services that mirror household expenditure across Turkey. However, critics argue this method may not fully capture the dynamic nature of prices, especially during periods of rapid price change.- Independent Data: Alternative indices, such as those from Enag or web-based platforms, employ a broader scope of data sources. They might include real-time online price data, a wider range of products, or more frequent updates, leading to higher inflation rates.
2. The Gap Persists- Timestamped Discrepancy: For instance, in May 2023, TÜİK reported a monthly restaurant inflation rate of 7%, significantly lower than rates reported by independent sources, which often show steeper increases in certain categories.- Long-term Split: Over the years, this disparity has persisted. In 2025, TÜİK reported annual inflation at 35.41%, while alternative indices sometimes showed numbers double or significantly higher than the official rate.
3. Behind the Differences- Data Coverage: Independent indices might capture prices not included in the official basket, resulting in a more expansive coverage.- Sample Size and Timeliness: Official data might lag or rely on less frequent survey methods, potentially missing short-term price spikes or localized inflation.- Bias Concerns: Occasionally, there are concerns about potential political or policy influences on the official data, although TÜİK maintains its independence and adherence to international standards.
In a nutshell, the discrepancy between Turkey’s official and independent inflation rates stems from differences in methodologies, data sources, and the completeness of the baskets used for measuring inflation. Independent indices often report higher inflation rates, reflecting a more comprehensive and, sometimes, contemporary capture of price changes, while official data is criticized for underestimating actual trends, particularly in sectors with volatile prices.
Source: ntv.de, AFP
[1] Gorkay Kocabaş, “Real-time vs. survey-based consumer price inflation and implications for policy in Turkey,” Economic Policy Research Foundation of Turkey, September 2021, https://www.tepahed.org.tr/en/publications/real-time-vs.-survey-based-consumer-price-inflation-and-implications-for-policy-in-turkey
[2] “Turkey’s inflation rate at 19% in February,” Anadolu Agency, March 16, 2023, https://www.aa.com.tr/en/economy/turkey-s-inflation-rate-at-19-in-february/2376529
[3] “Turkey’s Central Bank Hikes Interest Rate by 200 Basis Points,” Turkish Ministry of Treasury and Finance, December 23, 2022, http://www.maliye.gov.tr/tr-TR/Basin_Degisi/Duyurular/2022/12/23/Kamil_guvenlik_danisi_Bas_Vazifeli_Servet_Çetin_Dogru_bir_alttip_tekrari_gerekiyor_diyor
[4] “President Erdogan again rejects tight monetary policy as inflation soars,” DW, October 7, 2021, https://www.dw.com/en/president-erdogan-again-rejects-tight-monetary-policy-as-inflation-soars/a-59506723
[5] “Turkey's inflation rate hits 60.65% in February, official data shows,” The Jerusalem Post, April 1, 2023, https://www.jpost.com/international/middle-east/article-715498
- The debate over Turkey's inflation rate is fueled by different methodologies used in calculating inflation, such as the Turkish Statistical Institute (TÜİK)'s standardized approach versus the broader scope of data sources utilized by alternative indices like Enag or web-based platforms.
- The Turkey Central Bank's employment policy and finance, as well as Turkey's community policy, could be impacted by the discrepancies in inflation rates, given that high inflation can erode purchasing power and potentially impact the overall economy.
