Free gas in Turkey to have strong impact lowering May inflation: Report

The Turkish Statistical Institute (TUIK) said it would take into account the government’s decision to provide natural gas free of charge to households in May in its inflation calculations and this will have a “strong effect” in reducing May inflation.

Ahead of this month’s parliamentary and presidential elections, President Recep Tayyip Erdogan promised in April that gas would be provided for free in May. He won the presidential election runoff on Sunday.

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Erdogan also said 25 cubic meters of natural gas would be provided to households free of charge for one year from May.

TUIK said on Monday evening that a ‘zero price’ method would be applied for natural gas in calculations of May consumer price inflation and the free gas over the next year would also be reflected in calculations.

However, TUIK said there would a strong upward impact towards the end of the year in parallel with the rise in natural gas consumption.

Natural gas has a weight of 2.9 percent 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 TUIK could announce zero or slightly negative inflation for May, with the free natural gas bringing monthly inflation down by 2.4 points.

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