According to official figures, inflation in Turkey rose 85.5% year on year in October for the 17th consecutive month, as food and energy prices continued to rise.
For nearly two years, the country of 85 million has seen a dramatic increase in living costs.
The Turkish Statistical Institute reported Thursday that food prices were 99% higher than the same period last year, housing prices were 85% higher, and transportation prices were 117% higher.
According to official figures, inflation in Turkey rose for the 17th consecutive month in October, reaching 85.5% year on year as food and energy prices continued to rise.
The Turkish Statistical Institute reported Thursday that food prices were 99% higher than the same period last year, housing prices were 85% higher, and transportation prices were 117% higher.
The domestic producer price index increased by 157.69% year on year and 7.83% month on month. Consumer prices increased by 3.54% month on month.
The dramatic rise in living costs for the 85 million-strong country has been ongoing for nearly two years, coinciding with a significant depreciation of Turkey’s currency, the lira.
Turkish President Recep Tayyip Erdogan has refused to raise interest rates, claiming that it would harm the economy. Economists and critics say his policies have harmed the lira and fueled inflation, fueling a currency crisis.
Turkey’s central bank cut its key interest rate by 150 basis points on Oct. 20 for the third month in a row, from 12% to 10.5%, despite Turkish inflation of more than 83% at the time.
Erdogan claims that the cuts are pro-growth and will continue. The president remains adamant about lowering the country’s interest rate to single digits by the end of the year.
My biggest battle is with myself. My greatest foe is curiosity. We lowered the interest rate to 12%,” the president said at a late-September event. “Is that sufficient?” It is insufficient. This needs to be reduced even more.”
Following the release of the data, Liam Peach, senior emerging markets economist at London-based Capital Economics, wrote in an analyst note that Turkey’s central bank “will remain under pressure from President Erdogan for looser policy.”
Although the CBRT [Central Bank of the Republic of Turkey] stated that it will deliver another 150bp interest rate cut at its meeting later this month, there is a risk of further easing beyond that, adding more downward pressure to the lira, he added.
The lira was roughly flat on the day, trading at 18.61 to the dollar. It has lost more than 28% of its value against the US dollar this year, and nearly 50% in the last full year.
