Inflation in Turkey surges to 85.5%

On October 20, the Turkish Central Bank lowered interest rates for the third time in three months, reducing them by 150 basis points from 12% to 10.5% – despite Turkish inflation being over 83% at the time.

The price of Turkish food and fuel has been rising for seventeen straight months, and the price of Turkish housing rose by 85% in October, according to official figures. Transport was up by 117% in October, compared to the same period last year, according to the Turkish Statistical Institute. Domestic producer prices rose by 157.69%, and consumer prices rose by 7.83%. The monthly increase in consumer prices was 3.54%.

According to recent figures, Russian tourism to Europe fell significantly over the summer, but there was a rise in certain areas, including Turkey (here). Despite everything, Turkey’s inflation levels rose for the seventeenth consecutive month in October, suggesting that food and energy prices have risen again. 

As a result of the Turkish Statistical Institute’s report on Thursday, food and housing prices were 99% higher than they were in the same period last year, and transportation increased by 117%. The domestic producer price index rose by 157.69% in comparison with last year, and the monthly jump was 7.83%. 

There was a 3.54% rise in consumer prices. A sustained increase in living costs in the country of 85 million people has been ongoing for nearly two years, accompanied by a significant devaluation of the lira. President Recep Tayyip Erdogan of Turkey refuses to raise interest rates, believing it would harm the economy. Economists and critics say that this policy has prompted the lira to devalue and inflation to rise, leading to a currency crisis.

Image Credit: Tarik Haiga on Unsplash

Turkey reconstruction