Turkey’s annual inflation rose to a 24-year high in July as the country’s currency, the lira, continued to depreciate and the cost of living surged across the country, official data showed Wednesday. .
Turkish Statistical Institute Said Consumer prices rose 79.6% year-on-year and increased 2.37% month-on-month.
A Reuters poll had forecast a 2.9% month-on-month rise, while consumer price inflation for the year was forecast at 80.5%.
according to unofficial data Turkey’s monthly consumer price inflation rose by 5.03% in July, almost double the government’s figure, and annual inflation rose by 176.04%, according to independent inflation-tracking group ENAG.
Experts and opposition parties to President Tayyip Erdogan have regularly accused statistical agencies of falsifying official data for political reasons.
According to government data, the largest year-on-year increase in consumer prices was in the transport sector, up 119.11%, while food and non-alcoholic beverage prices rose 94.65%.
This was followed by furniture and home goods, which rose 88.35%, and alcoholic beverages and tobacco, which rose 82.66%.
According to the data, communications had the lowest annual growth rate, at 25.79%.
Inflation began to surge in Turkey around fall 2021, when the Turkish lira fell following the central bank’s decision to impose a 500-basis-point easing cycle as part of Erdogan’s “unorthodox” approach to monetary policy. rice field.
Opponents argue that lowering interest rates would only lead to higher inflation, but the president did not back down.
Prices are always on the rise
Since the lira’s fall, the cost of living has risen steadily, and with prices in supermarkets often changing from day to day or week to week, households end up spending significantly more on daily necessities.
Many families in Istanbul, Turkey’s largest city, have had to turn to Istanbul Halk Ekmek (‘public bread’ kiosks) to get discounted bread products cheaper than in the city’s bakeries.
That’s despite the government announcing significant tax cuts on basic food supplies in February to fend off inflation.
Inflation is further accelerating due to the economic impact of Russia’s invasion of Ukraine. Ukraine has dealt a heavy blow to a country that relies heavily on imports for things like energy, and its costs have skyrocketed since February.
Erdogan’s critics blame Erdogan’s monetary policy for Turkey’s current economic crisis.
“If this monetary policy continues, it will be impossible to stay ahead of inflation,” said Ogeday Topcular, money manager at RAM Capital SA in Geneva. Said Bloomberg on August 3rd. “Turkey’s monetary policy is unsustainable.”
Turkish economist Selva Bahar Baziki said this week that “unfixed expectations and the lira’s depreciation are further impacting prices,” adding: Leadership calls for even lower interest rates. “
Jason Tuby, Senior Emerging Markets Economist at Capital Economics, said: Said Reuters news agency on Wednesday said annual inflation may have peaked, but was likely to “remain close to the current very high rate for the next few months”.
However, the forecast range chart with the government’s latest inflation report shows that the price increase is set to peak at close to 90% in the September-October period.
The latest data comes as President Erdogan and his Justice and Development Party (AKP) face falling approval ratings ahead of general elections scheduled for June 2023.
follow
Katabella Roberts is a journalist currently based in Turkey. At The Epoch Times, she is primarily responsible for US-focused news and business.