Up 85.67%, Turkey’s inflation hits 25-year excessive

Up 85.67%, Turkey’s inflation hits 25-year excessive

Inflation continues to soar in Turkey the place it reached its highest degree in 25 years, at 85.5% over one yr in October, fueled by hovering vitality and meals costs, in accordance with official knowledge launched Thursday. The earlier annual inflation document dates again to 1997 with a rise of 85.67% over the yr.

Thursday morning, the Turkish lira remained steady on the announcement of those new figures because the rise was anticipated: the nationwide forex has already misplaced greater than 28% in opposition to the greenback since January 1, after having melted by 44% in 2021.

Learn additionally: The Fed’s essential rate of interest returns to its 2008 degree

Based on Tuik (the official statistics workplace), the gadgets most affected, as a result of they’re linked to the worth of vitality, are transport, up 117% over the past twelve months, meals (+99%) and housing (+85%), which makes day by day life significantly tough for Turks.

An underestimated quantity?

These official figures are, nonetheless, disputed by impartial economists from the Inflation Analysis Group (Nage) who declare that costs have risen 185% over the yr – together with 115% since January 1. Almost half (48%) of workers obtain the minimal wage, which quantities to 5500 Turkish liras, or lower than 300 {dollars}.

Regardless of two massive will increase within the minimal wage this yr – +50% in January and +30% in July – inflation is a scorching subject within the nation just a few months earlier than the presidential election scheduled for June 2023, wherein the president Recep Tayyip Erdogan can be a candidate for his succession.

Additionally learn: Recep Tayyip Erdogan, 20 years of reign over Turkey

A coverage that runs counter to classical financial theories

However the president’s financial coverage encourages inflation. The Central Financial institution lowered once more in October, for the third consecutive month, its essential key charge from 12% to 10.5%. Opposite to classical financial theories, President Erdogan asserts that prime rates of interest encourage inflation.

The Head of State, who says he favors progress and exports over value stability, often guarantees that Turkey will “overcome” the issue of inflation after the New Yr.

Learn once more: Regardless of the chance of recession, the ECB raises its charges by 0.75%

On Wednesday, the president even congratulated himself on the nice well being of the Turkish economic system: “Thank God, the wheels of our economic system are turning. Our financial mannequin, which we’ve got summarized as progress by funding, employment, manufacturing, export and present account surplus, is bearing fruit”.

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