Massive Inflation – Food Prices Nearly Doubled in Turkey


Turkey has been hit by huge price increases for months – in May consumer prices rose more than in almost a quarter of a century. Especially in the transport sector – including, for example, petrol – and in the food sector, costs have more or less doubled compared to the same month last year.

Goods and services cost an average of 73.5 percent more than a year earlier, the Turkish statistics office announced on Friday. This is the highest inflation since October 1998.

Minister of Finance sees positive trend
The transport sector saw the strongest increase with an increase of 108 percent, but food also cost almost twice as much with an increase of 92 percent compared to May 2021. Finance Minister Nureddin Nebati sees a positive trend, after all, prices are compared with the last month not so much.

Skepticism about published figures
From April to May, there was an increase of almost three percent, while economists had expected a stronger increase of 4.8 percent. Inflation is also higher than indicated, according to opposition politicians, economists and consumer polls. Many observers are suspicious that the statistical office no longer publishes average prices for individual items.

Lira lost enormously in value
Experts blame the weakening of the national currency, the lira, on high inflation, which lost 44 percent of its value against the dollar in the past year alone. Since the beginning of the year, the price has fallen by another fifth. This makes the imports on which the resource-poor country depends significantly more expensive. The fall in the lira was caused by interest rate cuts by the central bank, which made the national currency less attractive to investors.

No relief in sight
President Recep Tayyip Erdogan describes himself as an enemy of interest rates. He wants to boost the economy with low interest rates. The government has said inflation will fall under the new economic plan. This ensures low interest rates to stimulate production and exports.

The central bank expects inflation to peak in June. They don’t expect single-digit inflation until 2024.

Source: Krone


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