ISTANBUL, June 5 Reuters Turkish annual inflation fell to 39.59 in May, official data showed on Monday, broadly in line with expectations, largely due to the government offsetting price rises in other goods by providing natural gas free of charge.

The Turkish Statistical Institute TUIK said last week that it would apply a zero price method for natural gas in the consumer price index CPI calculations for May, a month in which President Tayyip Erdogan won reelection.

The government had pledged ahead of last month39;s elections that it would provide free gas in May, and a monthly free 25 cubic metres until May 2024. The move is seen costing the government 40 billion lira 1.89 billion.

May consumer prices rose 0.04 from a month earlier, compared with a forecast of a 0.2 fall in a Reuters poll.

The poll had forecast that annual consumer price inflation CPI would be 39.2, and was expected to end the year at 45.

The domestic producer price index was up 0.65 monthonmonth in May for an annual rise of 40.76, according to the TUIK data.

Clothing and shoe prices recorded the largest monthly increase with 9.85, followed by restaurant and hotel prices with 7.10.

Housing prices, which include natural gas, dropped 13.79 on a monthly basis, and were the only group to record a decline last month, lowering the overall monthly reading by 2.09 percentage points.

The weight of natural gas in the inflation basket is 2.9.

Core C inflation, which excludes energy, food, beverages and…