Turkey’s annual inflation spirals to 24-year high at 73%

Istanbul

Turkey’s annual inflation rate hit a 24-year high of 73 per cent in May, data revealed on Friday, as the country battles Russia-Ukraine war-induced inflation, high energy prices and a tumbling lira that has not recovered since December last year.

According to data from the country’s statistical agency, the consumer price index rose 73.5 per cent year on year in May, the highest level since October 1998.

Food prices also rose 91.6 per cent year on year, while transport prices jumped by 107.6 per cent—a growing source of discontent among the Turkish public.

The source of the current economic crisis has been blamed on Erdogan's unorthodox policy of pushing for lower interest rates to combat price rises.

The central bank refused again last week to raise its main rate, keeping it at 14 per cent.

Rumours of military intervention in northern Syria further hit the value of the Turkish lira, which was at 16.49 to the dollar on Friday. The currency has lost nearly 48 percent in value over the past year, reports AFP.

With elections around the corner in June 2023, the opposition and many economists have accused the national statistics agency of deliberately underestimating the magnitude of inflation.

President Recep Tayyip Erdoğan claimed he was embarking on a new economic model that would harness a cheap lira and a boom in exports to bring down inflation by eliminating the country’s longstanding trade deficit.

Treasury and Finance Minister Nureddin Nebati on Monday brushed aside concerns, saying that the current inflationary trend was fleeting and would “not spread over the long term and be permanent”.

“We will increase the welfare and purchasing power of our citizens over the past level,” AFP quoted Nebati as saying.

(With inputs from agencies)

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