ISTANBUL: Turkey's inflation rate is expected to have risen to a nearly 24-year high of 76.55% in May due to high food and energy prices as well as the weakening lira, a Reuters poll showed on Monday, while the median estimate for the end of the year rose to 63.5%.
Turkey's consumer price index has surged since last autumn as the lira weakened after the central bank in September embarked on a 500 basis-point easing cycle long sought by President Tayyip Erdogan.
The lira's slide and rising food and energy prices pushed inflation to 69.97% in April, the highest in 20 years, despite tax cuts on basic goods and government subsidies for some electricity bills to ease the burden on household budgets.
The median estimate of 14 institutions in the Reuters poll for annual consumer price inflation in April was 76.55%, with forecasts ranging between 72.50% and 80.40%.
That would make it the highest annual inflation reading since October 1998, when it hit 76.6%.
The median monthly estimate was 4.80%, in a range of 2.40% and 7.10%.
Economists have steadily revised their year-end estimates higher so far, with the median estimate of 15 economists for inflation at the end of the year now standing at 63.50% - some 11.5 percentage points higher than the median in the April poll.
Forecasts for the year-end figure ranged from 43.7% to 120%.
Credit Suisse said there were significant upside risks to its year-end inflation forecast, given that the central bank is likely to keep interest rates unchanged in the foreseeable future.
"This means that the real policy rate will move deeper into negative territory in the coming period, leaving the lira vulnerable to further depreciation and keeping the risks to our inflation forecasts firmly to the upside," it said in a note.
The lira has come under renewed pressure recently, shedding more than 9% this month and bringing its losses so far this year to nearly 20%.
The government has said inflation will fall with the new economic programme, which prioritises low rates to boost production and exports and aims to achieve a current account surplus.
The Turkish central bank revised up its inflation forecasts for this year and next mainly because of the rise in commodity prices and supply issues.
A presentation by Governor Sahap Kavcioglu last month suggested inflation would peak around 70% before June before sliding to 42.8% by the end of the year.
The central bank has held its benchmark interest rate steady at 14% in five meetings this year and said disinflation will start due to other measures it has taken, the so-called base effect and an expected end to the Ukraine conflict.
The Turkish Statistical Institute is scheduled to release May inflation data at 0700 GMT on June 3. (Reporting by Ali Kucukgocmen; Editing by Hugh Lawson)