Turkey’s inflation soars to 19-year high as lira crashes

Vienna, Jan 3 (EFE).- The annual consumer inflation rate in Turkey shot up to 36.08% in December, 14.77 points up on November’s figures and the highest level since September 2002, the Turkish Statistical Institute reported Monday.

The spike in prices from November to December was 13.58%, much higher than the monthly increase registered between October and November, of 3.5%.

According to TUÏK, the sectors that registered the highest price surges were transport and food, with year-on-year increases of 54% and 44%, respectively.

The year-on-year inflation index reached the highest level since 2002, the year that President Recep Tayyip Erdogan’s Justice and Development Party (AKP) came to power.

The Turkish lira, which depreciated by about 45% during 2021, continued to slide after the new data was published.

Inflation is well above interest rates, which are currently at 14%, after several cuts issued by the Turkish Central Bank.

Erdogan has been piling pressure on the institution to cut rates for months, convinced the unconventional move will cause inflation to drop, a policy most economists are wary of.

In statements to the KRT TV station, economist Oguz Demir said Monday that inflation will probably continue to climb in the coming months and could reach 40-50% if Erdogan’s government continued with the current economic agenda.

Several economists and opposition parties do not trust official inflation data and estimate the price increases could be even higher.

The independent Inflation Research Group made up of academics and economists, put the annual consumer inflation index at 82.81%, and at 19.35% for the month of December.

The Turkish cabinet will meet Monday and the president is expected to announce 25% wage increases for civil servants and pensioners from this month onwards. EFE

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