ISTANBUL (AP) – Annual inflation in Turkey soared to nearly 80 per cent in July, official data showed yesterday, with skyrocketing food, housing and energy prices hitting consumers hard.
The Turkish Statistical Institute said consumer prices rose by 79.6 per cent from a year earlier, up about one percentage point from June data.
Independent experts said inflation is much higher than official statistics. Economists also said the huge rise in inflation is caused by President Recep Tayyip Erdogan’s unorthodox belief that high borrowing costs lead to inflation despite established economic theory.
Turkey’s central bank slashed interest rates by five percentage points since September to 14 per cent, sinking the national currency. While the bank has not made further cuts this year, central banks across the world are moving the opposite way, raising interest rates to combat global inflation.
In comparison, annual inflation hit a record 8.9 per cent in the 19 countries that use the euro in July and a four-decade-high of 9.1 per cent in the United States (US) in June.
The Turkish lira lost 44 per cent of its value against the US dollar last year, eroding people’s ability to buy even basic items. The dollar was trading at 17.95 against the lira yesterday, with the lira’s value some 25 per cent lower than at the beginning of the year.