Inflation in Turkey is recorded to have fallen to an average of 42.4% by the end of the year. Meanwhile, the economy of Turkey is also believed to grow by 3.7%. Thus the annual data are taken from the UN report World Economic Situation and Prospects in 2023 for Turkey.

Inflation will slow to 13.5 percent in 2024, and the Turkish economy will grow by 3.5 percent. Meanwhile, until December 2022, Turkey's annual inflation slowed to 64.27 percent from 84.39 percent in November. 

According to the data, the most impacted housing and utilities. When looking at the impact of inflation in Turkey, what will happen now is also quite concerning. The UN even discussed this issue because the effect was classified as dangerous. 

The UN said that although Turkey's inflation has decreased, food and commodity prices are still very high. Meanwhile, the Turkish Central Bank said there would be no follow-up action.

What will be the main focus now is if Erdogan has good news. The good news in question also relates to the Lira exchange rate, which is ahead of the election in May.

The UN Had Issued an Inflation Alert for Turkey

Inflation in Turkey will fall to an average of 42.4%. This is good news for the Turkish economy. It was also recorded that according to the National Institute of Statistics (TUIK), housing and utilities were affected by 79.83% and transportation services rose 54.5%.

The World Economic Situation and Prospects also reports that the UN is anticipating Turkish inflation to decline to an average of 42.4% by the end of the year. This figure is significantly higher than the previous country's official projections.

Turkey also plans to fight inflation by lowering interest rates which are called into question by the findings of the UN study. In this effort, the goal is to promote economic growth, including in terms of exports and investment.

However, this country's plan has caused a crisis, which caused the Lira to lose nearly 30% of its value in one year. Turkish price growth reached an all-time high of 85.5% in October 2022 before slightly slowing to 64.3% in December 2022.

On the other hand, Turkey's central bank stuck to its forecasts for a sharp drop in inflation. This says that the increasing predictability of the Lira's exchange rate and financing support is no longer the basis for the hefty price rises, pushing the Turkish economy further.

The central bank's forecast also shows oil price at $80.8 in 2023, slightly above the forecast three months ago. However, to achieve the desired level, namely the inflation target, the Central Bank is trying to keep the economy stable and growth ahead of the election in May.

Turkey Central Bank Maintains Year-End Inflation Forecast at 22.3%, but there is Another Good News

According to the UN report, the Turkish economy has a great opportunity to expand by 3.7% this year and 3.5% in 2024. However, looking at Turkey's economic conditions this year, Turkish President Recep Tayyip Erdogan also comes with good news.

The rapid rollout has recently been a highlight of Turkey's economy. Last month, Erdogan eliminated a retirement age requirement, which caused more than 2 million workers to retire early and collect pensions, pushing massive economic growth.

Apart from that, Erdogan also included a raise in the minimum wage to $450 a month, then doubling the raise from the previous year. Furthermore, Erdoğan offered low-interest mortgages and canceled interest on student loans. Many see this as his political strategy.

Turkey's economic condition is improving. But the UN still thinks that the conditions faced by the Turkish public are still very concerning. Following this condition, the President of Turkey, ahead of the most challenging election, endeavored and provided good news.