ISTANBUL: Turkiye’s annual inflation rate climbed to 64.77% in December, official data showed on Wednesday, sustaining an upward trend that is expected to continue in coming months after a big rise in the minimum wage.

Month-on-month, consumer price inflation (CPI) was 2.93%, according to the Turkish Statistical Institute, dipping from 3.28% in November. The measure has eased in recent months as sharp monetary tightening has begun to weigh.

A Reuters poll had shown that annual inflation was expected to rise to 65.1% in December, with monthly inflation seen at 3.1%. In November, annual inflation was 61.98%.

The biggest sectoral price rise in 2023 was shown by hotels and restaurants, up 93.2%, followed by education at 82.1%. Key food and non-alcoholic drinks prices rose 72.0% during the year.

Turkiye central bank targets 50% lira deposits in banks in 2024

After years of easy policy, the central bank pivoted in June and has since raised its key interest rate by 3,400 basis points to 42.5% to rein in inflation.

But at the end of last year, the government announced a larger-than-expected minimum wage hike of 49% for 2024. It affects some 7 million workers and is expected to push inflation higher in the coming months, according to economists.

Inflation surged following a currency crisis at the end of 2021 and hit a 24-year peak of 85.51% in October 2022. Last year, the lira weakened some 37% against the dollar.

The domestic producer price index was up 1.14% month-on-month in December for an annual rise of 44.22%, the data showed.