Turkey’s inflation rises to 85.5%, a 24-year high, Following Interest rate cut. annual inflation rate rose to 85.51% in October, a new 24-year high, according to official statistics released on Thursday. This was slightly less than expected as the central bank reduced its policy rate despite rising prices. (Read More)
Since the lira sank last year as a result of the central bank decreasing its policy rate as part of an easing cycle that President Tayyip Erdogan had long advocated, inflation has skyrocketed.
The central bank decreased its policy rate to 10.5% during the past three months by a total of 350 bps. In opposition to the trend of tightening monetary policy throughout the world. It pledged further cut this month as the concluding step in the present easing cycle.
Consumer prices are up by 3.54% month over month, according to the Turkish Statistical Institute, less than the 3.60% predicted in a survey.
Consumer price inflation were anticipated to be 85.60% annually.
When Turkey was attempting to put an end to a decade of high inflation, the annual inflation rate in October was indeed the highest ever June 1998.
Burumcekci Consulting’s Haluk Burumcekci stated that if the lira does not depreciate further, the increasing inflation figure for October might well have peaked.
Unless there is a decline from the current level of the lira, he added. “We think that the consumer price inflation may have reached its high.”
Due to the ground impact in the final month of the year. A large drop in inflation could only occur in the 70–75% range. The lira’s 44% decline last year and 29% this year was the main reason behind soaring inflation, in addition to surging energy prices.
Textile costs increased by 8.34% month over month. Followed by food prices, which increased by 5.09%, and prices for furniture and other household goods. Which increased by 4.38%.
Food prices were next on the list of annual increases. At 99.05%, followed by furniture & household equipment at 93.63% & transportation, which includes gasoline prices, at 117.15%.
In the most recent survey, the average prediction for year-end inflation was 70.25%. While the Turkish central bank last week increased its prediction to 65.20%, marking its fourth upward adjustment of the year.
In order to achieve a surpluses, the government’s economic agenda gives low rates the top priority in order to increase production & exports.
In October, Domestic producer price index increased by 7.83% month over month and 157.69% year.