Turkish consumer price-based inflation rises up to 73.50 % on a year-on-year basis and 2.98 on MoM basis. It is the highest in 24 years and since 1998.
The CPI based inflation in Hotels, Furnished and household equipment, food and beverages and transportation is higher than the CPI total percentage of inflation on a year-on-year basis which is 76.83, 82.08, 91.63 and 107.62 percent respectively.
Whereas inflation in communication, Education, clothing, footwear and health are the other main groups where the inflation increases on a year-on year basis are low, which is 19.81, 27.48, 29.80, 37.74 percent respectively
The high transportation prices are complimenting the higher food prices
Turkish inflation has been in double digits for much of the past half-decade as authorities prioritized economic growth and exports, as the Turkish president does not want that the Turkish Central Bank will raise the interest rate. Experts say that Erdogan has his theory that the higher interest rates do not cut the inflation whereas increase it.
Experts are felt that the country’s economic conditions are degraded cause of Erdogan’s unorthodox economic policy to maintain lower interest rates to combat price rises.
Turkish President Recep Tayyip Erdoğan is particularly opposed to the measure, saying in late May: “Those who try to impose on us a link between the benchmark rate and inflation are either illiterates or traitors.”
Meanwhile, the Turkish Central Bank also last week maintains its monetary policy stagnant and maintained an interest rate at 14 percent. However, Central Bank had cut the interest rates to 500 basis points but now the Central Bank is continuing the policy of promoting the lira and pushing the long term investment loan in the market.
Speculations of military intervention in northern Syria further negatively hit the value of the lira, which was at 16.49 to the dollar on Friday. The currency has lost nearly 48 percent of its value over the last year and it is the worst-performing currency in the world against the dollar this year.
In elections looming Turkey the opposition and many economists have accused the Turkish statistical Institute of deliberately underscoring the magnitude of inflation.
