Inflation has risen in Turkey, as official figures from the Turkish Statistical Institute (Tüik) show that the country’s inflation has exceeded 85.5% per year. The inflation rate in Turkey has risen for 17 consecutive months and last month it reached a 24-year high.
Turkey’s Interest Rate Remains Low, While Inflation Crawls
Turkey, the transcontinental country located in Western Asia has suffered financial difficulties, because the economy of the region is in a difficult situation. On November 3, 2022, the Turkish Statistical Institute (Tüik) published the official figures of the country’s inflation rate and statistics show the rate reached 85.5% year after year.
Reports further indicates that the cost of living in Turkey has risen dramatically and the Tüik report shows that food prices in Turkey have climbed 99% higher year over year. Housing and rent jumped 85% for Turkish residents. On October 20, 2022, Turkey’s central bank and Turkish President Recep Tayyip Erdogan cut the region’s benchmark bank rate by 150 basis points (bps).
It was the third consecutive month of cuts according to statistics and Erdogan made it clear in September that interest was the enemy. “My biggest fight is against interest. My biggest enemy is interest,” Erdogan stated at the end of September. He also noted at the time that the interest rate had to “come down less” despite the red-hot inflation.
The International Monetary Fund (IMF) has too encouraged Turkey to raise the reference rate of the country. Reports say that a delegation has been sent by the IMF to Ankara and Istanbul to get people from both the public and private sectors to find a solution to Turkey’s economic turmoil.
“Political exchange rates at the end of 2021 added to existing vulnerabilities and were followed by lira depreciation and high inflation,” the IMF said. “The mission recommended early policy rate hikes accompanied by moves to strengthen central bank independence. Such moves would help keep inflation down for longer.
Despite the official inflation numbers from the Turkish Statistical Institute, third-party figures tell a completely different story. Economists dating from the Inflation Research Group (Enag) in detail, Turkey’s annual inflation rate is closer to 185.5%. Researchers say that the Enag Inflation Index has dynamic attributes that adapt more quickly to changes in Turkish consumption habits.
What do you think about Turkey’s rising inflation rate and President Recep Tayyip Erdogan suppressing interest rates? Let us know what you think about this topic in the comments section below.
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