Price increases in Türkiye eased further in January, official data revealed Friday, providing relief to consumers and a welcome boost for President Recep Tayyip Erdoğan heading into elections slated for mid-May.

Consumer prices grew at an annualized rate of 57.7% last month, compared to 64.3% in December, the Turkish Statistical Institute (TurkStat) data showed. The coronavirus pandemic and Russia’s invasion of Ukraine stoked inflation worldwide, spearheaded by soaring food, energy and commodity prices.

The January reading marked a third straight month of decrease and the lowest level in 11 months, a trend that Treasury and Finance Minister Nureddin Nebati on Friday said is expected to gain even further pace in the period ahead.

Inflation is down from the peak of 85.5% registered last October, a 24-year high.

"The current data indicates that we have left the most challenging period in inflation behind us and that the coming months will be much better," Nebati wrote on Twitter.

Economists attribute the slowdown in part to a slide in the price of Türkiye’s energy imports. Natural gas prices have fallen back to early 2022 levels after soaring in response to Russia's invasion of Ukraine.

Both annual and monthly readings came in above market expectations despite a favorable base effect, which is still expected to carry on until parliamentary and presidential elections planned for May 14.

"Overall, annual inflation maintained its downtrend in January as expected and is likely to decline further until May mainly due to strong base effects, albeit depending on the currency stability," said Dutch banking giant ING.

"While pricing pressures showed some further strengthening, increases across all groups were lower than they were last year and therefore helped the drop in the headline figure," the lender said in a blog.

Month-over-month, consumer prices rose 6.65%, the statistical institute said, nearly twice a Reuters poll forecast of 3.8% and the fastest since April 2022.

Annually, consumer price inflation was forecast to be 53.5%. A Bloomberg survey of economists saw it at 53.8%, while Anadolu Agency (AA) poll projected it would ease to 53.26%.

The sharp monthly rise was due to an array of new-year price hikes, including for public transit, tobacco products and services, as well as rising food prices.

The data had little impact on the Turkish lira, which was last at 18.818 to the U.S. dollar. It has been mostly flat since the summer, which has helped temper the pace of price increases. The lira depreciated some 30% against the dollar in 2022.

The government has tripled the minimum wage in the past year, raised state salaries, offered debt relief and hiked pensions for millions to ease the economic pressure on households.

The minimum wage has been increased by 55% for 2023, and Erdoğan also announced a measure that would allow more than 2 million people to retire early. He said the minimum wage may be hiked again throughout the year if necessary.

Authorities have urged grocery chains to do more to curb soaring consumer prices and pledged to take action against "speculative" pricing. The largest supermarket chains quickly obliged, freezing or cutting prices for hundreds of products in January. It was unclear how much price reductions may have affected the inflation print.

Core inflation, which strips out volatile items like food and energy, quickened for the first time since October and reached an annual 53% in January.

The underlying trend – as measured by the three-month moving average, annualized percentage change, based on seasonally adjusted series – for goods inflation remained broadly unchanged compared to the previous month.

However, the services group recorded a significant increase in annual inflation, contributing to the deterioration in underlying trends of core and headline inflation in January, ING said.

The domestic producer price index (PPI) was up 4.15% month-over-month for an annual rise of 86.46%, the data also showed, marking the lowest reading since the end of 2021.

"While the base effects have been the main determinant, we also see support from price drops in oil and utilities. However, the monthly reading of 4.2% hints at an increase in cost-push pressures, also likely contributed by the adjustment in the minimum wage," ING said.

The government has been endorsing an economic program, unveiled in 2021, aimed at eventually shifting from chronic deficits to a current account surplus and lowering inflation through more robust exports, production, investment and low interest rates.

Last year, the country’s central bank slashed its benchmark policy rate by five percentage points to 9%, citing signs of economic slowdown. It held the rates steady last month and will hold its next meeting on Feb. 23.

The monetary authority last month signaled rate cuts could be back on the agenda after it removed the forward guidance about "the current level of policy rate being adequate."

Erdoğan says high rates cause inflation and he had called for single-digit rates by the end of 2022. He has said the government’s new economic model is expected to yield results in the new year.

The government last year introduced several relief measures to help cushion the fallout from inflation, including a cap on rent increases, reduced taxes on utility bills and the unveiling of a major housing project for low-income families.

The country’s central bank last week said it was sticking to its forecasts for a sharp drop in inflation. It suggested the increasing predictability of the lira’s exchange rate plus financing support meant there was no longer a basis for large price rises.

Unveiling its first quarterly report last week, the Central Bank of the Republic of Türkiye (CBRT) stood by its previous year-end annual inflation forecasts for 2023 and 2024 of 22.3% and 8.8%, respectively.

Erdoğan has also said inflation would "quickly slow down" and end the year at about 20%. The president this week renewed his call for additional rate cuts, suggesting they would bring down inflation.

"At the moment, we have an interest rate of 9%, and we will lower it further," Erdoğan said, shifting focus to the Monetary Policy Meeting (MPC) this month.

Stabilizing price increases at a low level has been the top priority for the government ahead of the upcoming elections, which are seen as the most consequential vote in the centurylong history of the Republic.

"We will celebrate the 100th anniversary of our republic as a dynamic and powerful country that permanently solves the problem of inflation, takes a larger share of global trade, looks at the future with confidence, and increases its welfare rapidly by using its resources in the most efficient way," Nebati said.