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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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.

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) Watch WION's live TV here:

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

Apple products, especially iPhones, are known to enjoy fanfare across the globe. People wait in serpentine queues for long hours just to get their hands on the new gadgets, no matter how expensive they are.

Prices of Apple electronics, including iPhones, vary around the world. Import duty, among other taxes, levied by the countries make these products costlier.

But despite the steep price charged by the US-based tech behemoth, the demand for Apple products continue to soar.

Among the countries where Apple products cost more include Turkey.

According to web analytics platform Statcounter, as of November 2021, Apple’s market share in Turkey was around 16.67 per cent. In the previous year of the same month, the market share hovered around 15.58 per cent

Even though Samsung still rules the roost, Apple has been steadily gaining its market share in the transcontinental country.

But on November 24, Apple stopped the online sale of its products, ranging from iPhones to Macs, in Turkey.

Though the Turkish consumers were able to browse through Apple online store, they were unable to add products to their cart and instead were greeted with this message: “Not currently available”.

The reason for this is the monetary policy adopted by President Recep Tayyip Erdogan, which has resulted in the country’s currency, the lira, to crash as much as 45&nbsp;per cent this year.

Volatile currency

Turkey’s currency has been plunging to all-time lows against the US dollar and the euro in recent months.

Lira has lost more than 45 per cent of its value against the dollar this year. In November alone, the Turkish currency lost nearly 30 per cent of its value against the dollar.

In 2019, 1 US dollar was equal to 5.53 Turkish lira. But in November 2021, the lira fell to 13.10 against 1 US dollar.

The sharp devaluation of the Turkish lira and the resultant high inflation forced Apple to halt sales from its Turkish website temporarily.&nbsp;

As the currency had been falling over 40 per cent, the tech company had to adjust the prices of its products in order to extract the value of the original amount.

And on November 26, the US tech giant resumed its sales in Turkey and hiked the prices of its products between 25 per cent to 40 per cent.

The currency’s freefall is triggering a cascade of problems for the nation’s economy even as Erdogan presses ahead with a widely criticized effort to cut interest rates despite surging consumer prices.

The crash in the currency is the result of the country’s central bank cutting borrowing costs by 4 percentage points since September, in line with Erdogan’s wishes, even though inflation accelerated to around 20 per cent.

Erdogan, who has been at the helm of affairs for 19 years, has long argued that high interest rates cause inflation, contrary to general principles of economics.

Mainstream economics holds that lower interest rates lead to higher inflation because when money is cheaper to borrow, it loses its value relative to other currencies, and encourages consumers to spend more and businesses to produce more.

Rising cost of living

With inflation running at more than 21%, according to official figures, the prices of basic goods have soared and many people in the country of more than 83 million are struggling to make ends meet.

But the Turkish president has been pushing for low borrowing costs to stimulate the economy, boost growth and exports, and create jobs.

He has vowed to break the cycle of an economy dependent on short-term “hot money” lured by high interest rates.

A devout Muslim, whose religion regards usury and charging interest as a sin, Erdogan describes interest rates as “the mother and father of all evil.”

Recently, he had fired three central bank governors who resisted lowering rates.

The Turkish leader has blamed the currency crash on foreign forces bent on destroying Turkey’s economy and says his government is waging “an economic war of independence.”

Apple products, especially iPhones, are known to enjoy fanfare across the globe. People wait in serpentine queues for long hours just to get their hands on the new gadgets, no matter how expensive they are.

Apple products, especially iPhones, are known to enjoy fanfare across the globe. People wait in serpentine queues for long hours just to get their hands on the new gadgets, no matter how expensive they are. Prices of Apple electronics, including iPhones, vary around the world. Import duty, among other taxes, levied by the countries make these products costlier. But despite the steep price charged by the US-based tech behemoth, the demand for Apple products continue to soar. Among the countries where Apple products cost more include Turkey. According to web analytics platform Statcounter, as of November 2021, Apple’s market share in Turkey was around 16.67 per cent. In the previous year of the same month, the market share hovered around 15.58 per cent Even though Samsung still rules the roost, Apple has been steadily gaining its market share in the transcontinental country. But on November 24, Apple stopped the online sale of its products, ranging from iPhones to Macs, in Turkey. Though the Turkish consumers were able to browse through Apple online store, they were unable to add products to their cart and instead were greeted with this message: “Not currently available”. The reason for this is the monetary policy adopted by President Recep Tayyip Erdogan, which has resulted in the country’s currency, the lira, to crash as much as 45 per cent this year. Volatile currency Turkey’s currency has been plunging to all-time lows against the US dollar and the euro in recent months. Lira has lost more than 45 per cent of its value against the dollar this year. In November alone, the Turkish currency lost nearly 30 per cent of its value against the dollar. In 2019, 1 US dollar was equal to 5.53 Turkish lira. But in November 2021, the lira fell to 13.10 against 1 US dollar. The sharp devaluation of the Turkish lira and the resultant high inflation forced Apple to halt sales from its Turkish website temporarily. As the currency had been falling over 40 per cent, the tech company had to adjust the prices of its products in order to extract the value of the original amount. And on November 26, the US tech giant resumed its sales in Turkey and hiked the prices of its products between 25 per cent to 40 per cent. The currency’s freefall is triggering a cascade of problems for the nation’s economy even as Erdogan presses ahead with a widely criticized effort to cut interest rates despite surging consumer prices. The crash in the currency is the result of the country’s central bank cutting borrowing costs by 4 percentage points since September, in line with Erdogan’s wishes, even though inflation accelerated to around 20 per cent. Erdogan, who has been at the helm of affairs for 19 years, has long argued that high interest rates cause inflation, contrary to general principles of economics. Mainstream economics holds that lower interest rates lead to higher inflation because when money is cheaper to borrow, it loses its value relative to other currencies, and encourages consumers to spend more and businesses to produce more. Rising cost of living With inflation running at more than 21%, according to official figures, the prices of basic goods have soared and many people in the country of more than 83 million are struggling to make ends meet. But the Turkish president has been pushing for low borrowing costs to stimulate the economy, boost growth and exports, and create jobs. He has vowed to break the cycle of an economy dependent on short-term “hot money” lured by high interest rates. A devout Muslim, whose religion regards usury and charging interest as a sin, Erdogan describes interest rates as “the mother and father of all evil.” Recently, he had fired three central bank governors who resisted lowering rates. The Turkish leader has blamed the currency crash on foreign forces bent on destroying Turkey’s economy and says his government is waging “an economic war of independence.”

Apple briefly stopped selling its products in Turkey, but why?

Lines outside bread stores and gas stations; farmers defaulting on loans; impromptu street demonstrations. The signs of economic distress in Turkey are all too clear as the lira continues a dizzying slide.

Sporadic protests have broken out around Turkey and the opposition parties have called for a series of rallies to demand a change of government after the lira crashed sharply last week. The latest week of turmoil follows months of worsening economic conditions for Turkish citizens. The currency has lost more than 45% of its value this year, and nearly 20% in the last week, continuing its downward trend on Tuesday.

Economists have tied the currency crisis to President Recep Tayyip Erdogan’s direct interference in monetary policy and his determination to lower interest rates.

The latest crash in the currency came after Erdogan gave a speech last week outlining his determination to keep rates low as a way of promoting economic growth. He reaffirmed his opposition to raising rates again in comments to reporters aboard his plane as he returned from a visit to Turkmenistan on Monday.

“I have never defended raising interest rates, I don’t now and will not defend it,” he told the reporters. “I will never compromise on this issue.”

There are rumblings of public dissent, unusual for a country where only officially sanctioned demonstrations are permitted and the main television channels and newspapers follow the government line.

Scores of people have been detained for joining street protests. The police detained 70 people in several districts of Istanbul last Wednesday who were protesting the government’s management of the economy, after a record drop in the lira the day before.

The Confederation of Progressive Trade Unions issued a blunt statement on Wednesday. “That’s enough. We want to make ends meet,” it read. “Unemployment, high living costs, price increases, and bills are breaking our backs.”

Necla Sazak, an 80-year-old retired bank employee heading home with a bag of groceries, said she was surviving on credit cards.

“Our purchasing power dropped — our money has no value anymore,” she said.

Erdogan has promised that low interest rates will help kick start the economy within three to six months, but economists said they detected little confidence in his policies at this stage.

Lines outside bread stores and gas stations; farmers defaulting on loans; impromptu street demonstrations. The signs of economic distress in Turkey are all too clear as the lira continues a dizzying slide.

Lines outside bread stores and gas stations; farmers defaulting on loans; impromptu street demonstrations. The signs of economic distress in Turkey are all too clear as the lira continues a dizzying slide. Sporadic protests have broken out around Turkey and the opposition parties have called for a series of rallies to demand a change of government after the lira crashed sharply last week. The latest week of turmoil follows months of worsening economic conditions for Turkish citizens. The currency has lost more than 45% of its value this year, and nearly 20% in the last week, continuing its downward trend on Tuesday. Economists have tied the currency crisis to President Recep Tayyip Erdogan’s direct interference in monetary policy and his determination to lower interest rates. The latest crash in the currency came after Erdogan gave a speech last week outlining his determination to keep rates low as a way of promoting economic growth. He reaffirmed his opposition to raising rates again in comments to reporters aboard his plane as he returned from a visit to Turkmenistan on Monday. “I have never defended raising interest rates, I don’t now and will not defend it,” he told the reporters. “I will never compromise on this issue.” There are rumblings of public dissent, unusual for a country where only officially sanctioned demonstrations are permitted and the main television channels and newspapers follow the government line. Scores of people have been detained for joining street protests. The police detained 70 people in several districts of Istanbul last Wednesday who were protesting the government’s management of the economy, after a record drop in the lira the day before. The Confederation of Progressive Trade Unions issued a blunt statement on Wednesday. “That’s enough. We want to make ends meet,” it read. “Unemployment, high living costs, price increases, and bills are breaking our backs.” Necla Sazak, an 80-year-old retired bank employee heading home with a bag of groceries, said she was surviving on credit cards. “Our purchasing power dropped — our money has no value anymore,” she said. Erdogan has promised that low interest rates will help kick start the economy within three to six months, but economists said they detected little confidence in his policies at this stage.

‘Our money has no value’: Frustration rises in Turkey at lira crisis

Inflation is now at 20% in Turkey, as the Lira which is the official currency of Turkey has hit a record low of 13.44 against the US Dollar. Turkish currency crashed by 8% in a single day but recovered by a few cents later.

Turkey: Lira crashed to a new low of 13.44 against the dollar

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