Türkiye’s statistical authority on Monday said it would factor in the government's decision to supply free natural gas to households in May in its calculations and that this is expected to have a “strong effect” in reducing inflation.
Ahead of this month's parliamentary and presidential elections, President Recep Tayyip Erdoğan promised in April that gas would be provided for free in May.
On Sunday, he won the presidential election runoff, securing a new strong mandate that will see him govern until 2028.
Türkiye in April launched the production and started pumping natural gas into the national grid from a vast reserve in the Black Sea, which was discovered gradually in August 2020.
The reserve is estimated to hold over 710 billion cubic meters (bcm) of gas, estimated to be worth around half a billion dollars, promising to curb the country's dependence and cut consumer energy prices.
Erdoğan also said 25 cubic meters of natural gas would be provided to households free of charge for one year from May.
On Monday evening, the Turkish Statistical Institute (TurkStat) said that a “zero-price” method would be applied for natural gas in calculations of May consumer price inflation and that the free gas over the next year would also be reflected in calculations.
However, the authority said there would be a strong upward impact toward the end of the year in parallel with the rise in natural gas consumption.
Natural gas has a weight of 2.9% in inflation calculations. May inflation data will be announced on June 5.
Bilkent University academic Hakan Kara, the former central bank chief economist, said on Twitter that TurkStat could announce zero or slightly negative inflation for May, with the free natural gas bringing monthly inflation down by 2.4 points.
The inflation has moderated over the last six months and eased to an annual 43.68% in April, almost halving from 85.51% in October, a 24-year peak.
In his victory speech late Sunday, Erdoğan termed inflation the country’s most urgent issue.
