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Inflation in Turkey approached 80 percent | News from Germany about Europe | DW

Annual inflation in Turkey in July increased to 79.6 percent – the highest since 1998. About it statistician institute of turkey reports on Wednesday, August 3rd. As a result of July, the monthly price increase amounted to 2.37 percent.

Prices in the transport sector are growing the most in the country – over the year they increased by 119.11 percent, while food and beverage prices rose by 94.65 percent, analysts say. Reuters analysts predicted an increase in consumer prices in annual terms at the level of 80.5 percent, The Financial Times newspaper expected their growth in July by 80.1 percent.

Annual inflation in the country is at its highest level since September 1998 – then it reached 80.4 percent. In the wake of that crisis, came to power in 2003 Recep Tayyip Erdogannow holding the post of President of Turkey, recalls The Guardian.

Inflation rises due to weakening lira

Inflation in Turkey began to rise in the fall of 2021, when the lira fell sharply after the country’s central bank lowered the rate to 14 percent, Reuters notes. This year, price increases have further spurred economic consequences of the Russian invasion of Ukraine and ongoing fall of the lyre. The currency has weakened 44 percent against the dollar in 2021 and has fallen another 27 percent this year.

Analysts cite Erdogan’s policy of lowering interest rates to boost economic growth, which began in 2018, as one of the reasons for the rise in prices. This was done against the advice of the head of the Central Bank, which caused the lira to fall to an all-time low and to increase spending in a country dependent on imports of materials and energy. The Guardian. Since then, the president has fired three central bankers.

Economists doubt the veracity of inflation figures

Some analysts and opposition in the country believe that the true inflation rate is higher than official figures, write the FT and Reuters. The Istanbul Chamber of Commerce reported in June that annual inflation in Turkey’s largest city reached 94 percent. A report by Turkish independent economists group ENAG showed that consumer prices rose 175 percent in June compared to last year, The Guardian reported.

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