Turkey’s annual inflation passes 80% for first time in 24 years

Turkey’s annual inflation passed 80% in August, according to official data on Monday, further hitting consumers facing high energy, food and housing costs.

The Turkish Statistical Institute said consumer prices rose by 80.21% from a year earlier, up 0.6 percentage points from the previous month.

Independent experts say inflation is much higher than official statistics. The Inflation Research Group put the annual rate at 181%.

Turkey’s central bank unexpectedly cut interest rates to 13% in August despite rising prices, a plunging lira and an unbalanced current account. The central bank slashed interest rates by 5 percentage points between September and December last year. The rate then stayed at 14% until last month.

Turkey is currently pursuing what some economists have described as an economic experiment as Turkish president, a notorious opponent of high interest rates, has insisted on maintaining one of the world’s lowest interest rates in real terms and inflation has soared as a result.

Russia’s invasion of Ukraine and the lira’s decline have stoked inflation. The lira has plunged over 50% against the U.S. dollar since the central bank began cutting rates.

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