Turkey’s inflation reached 80% in July as global energy and commodity costs and the lira’s steady decline continue to push prices higher.
Gatekeepers News reports that the country’s inflation has surged since last autumn when the lira slumped after the central bank gradually cut its policy rate by 500 basis points to 14% in an easing cycle sought by President Tayyip Erdogan.
The country has been further stoked this year by the economic fallout from Russia’s invasion of Ukraine, as well as the lira’s continued decline. The currency shed 44% against the dollar last year and is down 27% this year.
The median estimate of 10 institutions who participated in Reuters’ poll for annual inflation in July was 80.50%, with forecasts ranging between 79.45% and 82.50%.
That would make it the highest reading since August 1998, when annual inflation was 81.4% and Turkey was battling to end a decade of chronically high inflation.
The median forecast for the monthly figure was 2.90%, in the range of 2.28% and 4%.
According to the median estimate of 11 economists in the poll, inflation was seen falling only to 70% by the end of the year, with forecasts between 60.75% and 77%.
The median for the year-end was 69.5% in the previous Reuters poll conducted in June.
However, the government has said inflation will fall with the new economic programme, which prioritises low rates to boost production and exports and aims to achieve a current account surplus.
President Erdogan has said that he expects inflation to come down to “appropriate” levels by February-March next year, while the central bank raised its end-2022 forecast to 60.4% on Thursday from 42.8% previously.
