Turkey: inflation rate higher than in 20 years

Created: 01/03/2022Updated: 01/03/2022, 12:00 PM

The Turkish lira is losing value more and more.

© Abdurrahman Antakyali / Depo Pho / Imago Images

The Turks have felt the rise in prices for a long time in everyday life.

Now the statistics agency has announced a significant increase in inflation.

It climbs to its highest level in two decades.

Ankara - Inflation in Turkey is getting increasingly out of control: In December, the inflation rate jumped over the mark of 30 percent and reached 36.08 percent year-on-year, the highest level in around two decades, as the Turkish statistical office announced on Monday.

According to the Ankara authorities, food and transport have become the most expensive.

Analysts were surprised by the strength of the price hike.

They had expected a good 27 percent.

Turkey: Groceries in particular became more expensive

The rate has more than doubled since the summer.

The increase in the cost of living has recently been driven by higher food prices.

From November to December alone, the rate of price increase was 13.6 percent.

In December, producer prices even increased by 79.89 percent year-on-year.

The prices that producers charge for their goods will likely, with some delay, at least partially affect consumer prices.

In the foreign exchange market, the Turkish lira came under pressure again on Monday.

The rapid decline in the rate of the Turkish lira, which goes hand in hand with inflation, makes it more expensive to import goods into the country.

In addition, there are comparatively high raw material prices on the world market.

This is one of the reasons why the country is in a difficult economic situation, which is reflected in high unemployment.

Turkish lira: key interest rate lowered further and further under pressure from Erdogan

The Turks also have to cope with a significant increase in energy prices at the beginning of the year.

Electricity prices for households rose by around 50 percent in the new year, and those for high-consumption companies by more than 100 percent.

The prices for gas also increased significantly.

The situation has been worsened for months by the Turkish central bank, which, under pressure from Turkish President Recep Tayyip Erdogan *, has recently continued to lower the key interest rate despite high inflation.

Central bankers are actually bracing themselves against galloping inflation with higher key interest rates.

However, contrary to economic doctrine, Erdogan is of the opinion that high interest rates promote inflation.

The Turkish opposition leader Kemal Kilicdaroglu again sharply criticized Erdogan.

The "economic genius" in the presidential palace screwed up everything it touched, he wrote on Twitter.

The opposition has long questioned the official inflation figures and is assuming an even higher rate of inflation.