Pedestrians walk in the Mahmutpasa district, one of Istanbul’s largest textile shopping malls, near the Grand Bazaar in Istanbul on November 24, 2021.
OZAN KOSE | AFP | beautiful pictures
The annual inflation rate in Turkey has risen to a 20-year high of 48.7%, state data revealed on Tuesday, despite months of President Recep Tayyip Erdogan assuring that the numbers The spike is temporary and his government can ease the pain of the Turks. weighed down by the rising cost of living.
According to the Turkish Statistical Institute, the price of consumer goods increased by 11.1% in January from the previous month, higher than analysts’ expectations, lasting from 9% to 10%.
The Turkish lira has lost 44% of its value by 2021 in a course due to Mr. Erdogan’s refusal to increase the rate as inflation continues to escalate. The currency turmoil hit the Turks hard, as the value of their wages fell and the cost of goods and energy rose dramatically. The president has prioritized credit and exports, while consistently arguing – against all economic orthodoxy – that raising interest rates is actually exacerbating inflation rather than containing it.
Turkey’s central bank has cut interest rates by 500 basis points since September to 14%.
“The result of Erdogan’s failed monetary policy test,” Timothy Ash, senior emerging markets strategist at BlueBay Asset Management, wrote in a note following the inflation report.
“Hard to see how CBRT is [Turkish central bank] could cut inflation when it failed to raise interest rates, and Erdogan will focus on trying to get credit growth back to boost his popularity ahead of the elections. “
Turkish Finance Minister Nureddin Nebati told Nikkei news agency on Wednesday that he expected inflation to stay below 50%, reaching a peak in April.
