Economists have started revising their February inflation expectations downward after Türkiye reduced patient contribution fees for services at public health care institutions.
A regulation last month increased the fees by 233% for health services in public hospitals, while fees for training and large city hospitals were lifted by 543%. However, this was reversed by a notification published in the Official Gazette over the weekend.
The change had already contributed over 0.5 percentage points to January's monthly inflation, and economists had expected the effect to continue through February and March, pushing annual inflation up by 1.5 percentage points.
However, the latest move has generally lowered the total effect by 0.4-0.8 percentage points from the previous estimate, economists said.
Türkiye's annual inflation eased to 42.12% in January, while the monthly rate climbed more than expected to 5.03% due to a minimum wage hike and several new-year price updates.
Economists have now started lowering their monthly inflation forecast for February from nearly 4% to below 3%.
QNB bank, in its daily bulletin, has revised its February consumer price index (CPI) forecast from 3.6% to 3%.
"We estimate that the change will lower February inflation expectations by nearly 1 percentage point. We have also revised our February inflation forecast to a range of 2.9%-3.1%," said Ibrahim Ünalmış, a professor at Bahçeşehir University.
Among the economists Reuters spoke to, the lowest current estimate for February stands at 2.8%.
Economists also noted that the effect observed in January might be revised downward due to a process for refunding the amounts paid. If this revision is not swift, a monthly decline in the health care component could be observed in February.
Responding to an inquiry, the Turkish Statistical Institute (TurkStat) said there would be no changes related to January, and that the update would only affect February.
In the January survey, market participants expected February monthly inflation to be 2.65%, while the central bank's latest survey of market participants in mid-February showed an expectation of 3.23%.
Following the patient co-payments update, forecasts have started shifting to a range of 2.5%-3%.
The patient contribution fees at training and research hospitals affiliated with the Health Ministry, neighborhood polyclinics, and state and foundation university hospitals have been reduced from TL 45 ($1.24) to TL 20, according to the Social Security Institution (SGK) health practice notification published in the Official Gazette on Sunday.
No change was made to the fees of TL 50 for secondary and tertiary private health care providers.
