Turkish inflation has skyrocketed following eight months of decline, the latest figures have shown.
Inflation reached 58.9 per cent year-on-year in August, the highest since the end of 2022, according to official data published on Monday (September 4).
Fuelled by the depreciation of the Turkish lira and tax hikes, aligned with the central bank’s monetary tightening policy, inflation rose again for the second month in a row.
Unorthodox Turkish economic policy under President Recep Tayyip Erdogan has meant that the country’s inflation rate has reached eye-watering levels.
In October last year, the inflation level was at 85.5 per cent. The UK consumer price index inflation rate at the same time was just under 12 per cent.
Following eight months of decline, inflation in Turkey reached its lowest levels in 18 months in June this year, at 38.2 per cent.
But since then, levels of inflation have risen dramatically, up to 47.8 per cent year-on-year in July and now it sits at 58.9 per cent.
And although the official figures are high, they might not even reveal the entirety of the problem.
Independent economists from the Inflation Research Group (Enag) put the year-on-year rise in consumer prices at as high as 128 per cent.
The Turkish Central Bank, whose mission is to guard price stability, has raised its main key interest rate from 8.5 per cent to 25 percent since June to curb inflation.
At the end of July, when inflation started accelerating again, the bank revised its forecasts, saying that inflation will reach 58 per cent by the end of 2023 — more than double the previous projections — before returning to “stability” from 2025.
But that figure has already been exceeded this month, with projections for future inflation now proving concerning.
