Inflation passes 80% mark in Turkey
This inflation at 80.21% on one year is a record high since 1998.
Inflation crossed the 80% mark in August in Turkey, at 80.21% year on year, against 79, 6% in July, the highest level since 1998, according to official data released on Monday.
This very sharp rise in prices is largely explained by the collapse of the Turkish lira, which has lost almost 55% of its value in one year against the dollar.
Contrary to conventional economic theories, President Recep Tayyip Erdogan believes that high interest rates promote inflation. But his heterodox monetary policy caused the national currency to fall, fueling rising prices.
The Turkish Central Bank once again surprised the markets in mid-August by lowering its main key rate from 14% to 13% despite galloping inflation.
“The biggest problem we are facing right now is the cost of living.
— Recep Tayyip Erdogan, President of Turkey
Mr. Erdogan, however, refuses to change his economic policy nine and a half months before the next presidential election.
Despite two increases in the minimum wage since January 1, soaring prices are becoming difficult to sustain for some Turks.
The Turkish lira has lost 55% of its value in one year against the US dollar.
The opposition and many economists accuse besides the National Statistics Office of underestimating the extent of inflation by more than half.
The Research Group on Inflation; inflation, composed of independent Turkish economists, said Monday morning that inflation had reached 181.4% year on year in August.
Turkey is experiencing a almost non-stop double-digit inflation since the start of 2017, but it had never reached such levels since the coming to power of Recep Tayyip Erdogan in 2003.