Turkey’s annual inflation soars significantly as living costs dramatically rise

People stroll at a street market in Ankara, Turkey November 18, 2021. REUTERS/Cagla Gurdogan

SULAIMANI (ESTA) — Turkey’s annual inflation ratio soared to a fresh 24-year high of 80.21% in August after an expected move by the central bank, cutting interest rates and stoking a nearly year-long cost-of-living crisis.

Inflation has raced higher since last autumn when the central bank gradually cut its policy rate by 500 basis points to 14%, in an unorthodox easing cycle sought by President Tayyip Erdogan that set off a lira crisis.

Despite expectations that inflation will remain lofty, the bank cut rates by another 100 basis points last month to 13%, citing a slowing economy.

Last month’s reading was the highest since 81.4% in August 1998, when Turkey was battling to end a decade of chronically high inflation, according to data.

The domestic producer price index rose 2.41% month-on-month in August for an annual rise of 143.75%.

The highest annual inflation was seen in transportation, where prices rose 116.87% year-on-year, despite prices in the sector dropping 1.78% month-on-month. In the key food and non-alcoholic drinks sector, prices jumped 90.25%.

Finance Minister Nureddin Nebati said that while major global economies were concerned about recession at the same time as inflation rises, Turkey was continuing its “fight against inflation without stopping investment and production”.

   

 

 

(Esta Media Network/Reuters)

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