Turkey’s inflation surges to 48.7% as Prime Minister Erdogan prepares to cut interest rates again

Turkey’s annual inflation rate surged to 48.69% in January, the highest in 20 years. data From the Turkish Institute of Statistics (TUIK), as President Tayyip Erdogan continues his unorthodox approach of lowering interest rates in the face of rising inflation.

According to TUIK, consumer prices rose 11.1% from the previous month, up 48.69% from the same period last January, and up from an annual rate of 36.1% in December.

Transportation-related prices in January rose 68.9% year-on-year, food and beverage prices rose 55.61%, and furniture and home appliances rose 54.53%.

According to TUIK, the annual growth rate for correspondence, education, clothing, shoes and health is the lowest, but several clothing and shoe stores in Istanbul offer so-called “indirims” to their customers. Despite this, we have seen thousands of lira price increases in recent months. Or for sale.

according to Unofficial data According to the independent inflation research group ENAG, Turkey’s annual consumer price inflation rate rose 15.52% in January, well above official claims.

The group said inflation has risen 114.87 percent in the last 12 months.

The Turkish lira dropped almost half of its value last year in response to a series of interest rate cuts by central bank governor Sahap Kavsiogur as Prime Minister Erdogan called for credit and exports to be prioritized.

The move by Prime Minister Erdogan is driven by soaring prices across the country and the fact that Turkey relies heavily on imports of energy and many consumer goods.

In response to the weakening of the lira, many Turks have opted to stock up on gold and store it in safer foreign currencies such as the euro and the US dollar.

With a population of about 85 million in Turkey, salaries in local currency have been significantly devalued, and many are looking for a second job to highlight themselves and their families.

The government raised the minimum wage by 50%, but since September the central bank has cut interest rates by 500 basis points to 14%.

But given the soaring costs of everything from food to household goods, it’s clear how salary increases will affect Turks who are crippled by the economic downturn. not.

The latest data show that Erdogan Chetinkaya, vice president of the Turkish banking regulator, was appointed a year after Prime Minister Erdogan took office as TUIK’s fourth head since 2019. Before I knew it, I appointed him on behalf of Sait Erdal Dinçer.

The reason for the move of Turkish media was unknown Report Prime Minister Erdogan was dissatisfied with agency data showing that inflation had reached its highest levels since the AK party first took office.

Opposition parties and some economists have accused TUIK of distorting official data for political reasons. These claims were dismissed by the agency.

Saturday, Erdogan Said Interest rates will fall again, while inflation remains low.

“We will lower interest rates as we have already done,” Erdogan told an audience in the northern province of Giresun.

“We are aware of the fact that inflation is a serious burden on citizens,” Erdogan said. “You know the fight against my interest rates. We are lowering interest rates, and we are lowering them. At that time, know that inflation will also go down, it will go down even more.” He explained.

“Exchange rates are stable, inflation is falling, prices are falling, all of which are temporary,” he added.

Lira was trading at 13.55 against the dollar at 12:31 GMT on Thursday.

Catabella Roberts


Katabella Roberts is a reporter currently based in Turkey. She focuses primarily on the United States and covers the news and business of The Epoch Times.