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Turkey’s annual inflation hits fresh 24-year high of 79.6 percent

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Turkish inflation rose to a fresh 24-year high of 79.6 percent in July, data showed on Wednesday as the lira’s continued weakness and global energy and commodity costs pushed prices higher, Reuters reported.

Inflation began to surge last autumn when the lira slumped after the central bank gradually cut its policy rate by 500 basis points to 14 percent in an easing cycle sought by President Recep Tayyip Erdoğan.

Month-on-month, consumer prices rose 2.37 percent in July, the Turkish Statistical Institute (TurkStat) said, below a Reuters poll forecast of 2.9 percent. Annually, consumer price inflation was forecast to be 80.5 percent.

The biggest annual rise in consumer prices was shown by the transportation sector, up 119.11 percent, while food and non-alcoholic drinks prices climbed to 94.65 percent.

Inflation this year has been fuelled further by the economic fallout from Russia’s invasion of Ukraine, as well as the lira’s continued decline. The currency weakened 44 percent against the dollar last year and is down another 27 percent this year.

Annual inflation is now at the highest level since September 1998, when it was 80.4 percent and Turkey was battling to end a decade of chronically high inflation.

Last week’s Reuters poll showed annual inflation was seen declining to some 70 percent by end-2022, easing from current levels as base effects from last year’s inflation surge take effect.

The domestic producer price index climbed 5.17 percent month-on-month in July for an annual rise of 144.61 percent.

Opposition leaders and many Turks no longer trust official government data.

The annual inflation rate reported this week in İstanbul — headed by a popular opposition party figure — was almost 100 percent.

A respected monthly study released by independent economists from Turkey’s ENAG research institute showed that the official annual rate of consumer price increases reached 176 percent in July compared to 174 percent in June.

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