Inflation in Turkey hits 20-year high of nearly 49%

Turkey’s annual inflation came in at nearly 49%, hitting a nearly 20-year high and further eroding people’s ability to buy even basic things like food

Turkey Economy (Copyright 2022 The Associated Press. All rights reserved)

Turkey’s annual inflation came in at nearly 49% on Thursday, hitting a nearly 20-year high and further eroding people’s ability to buy even basic things like food.

The Turkish Statistical Institute said the consumer price index increased by just over 11% in January from the previous month. The yearly increase in food prices was more than 55%, according to the data.

The inflation rate was the highest since April 2002 in a country that is facing an economic upheaval and currency crisis, triggered by a series of interest rate cuts.

President Recep Tayyip Erdogan has declared himself an “enemy” of high interest rates, insisting that they cause inflation — a stance that contradicts established economic thinking.

Turkey’s central bank has cut rates by 5 percentage points since September, to 14%, before pausing them in January.

Erdogan vowed this week that his government would “reduce the spiral of high inflation with each passing month” and completely eliminate it “after a while.”

Opposition parties have questioned the Turkish Statistical Institute’s independence and have challenged its data. The independent Inflation Research Group put Turkey’s actual annual inflation at a stunning 114.87%.

Last week, Erdogan replaced the head of the statistical institute. No reason was given for the change.