euro, dollar, Turkish lira

Inflation in Turkey exceeded 79% in July

The cost of transport rose 119% in the last year, and food 95%. The Turkish Central Bank expects inflation to reach 90%.

Inflation in Turkey exceeded 79% during the month of July, marking its highest rate in the last 24 years, according to data published yesterday by the Turkish Statistical Institute (TÜİK), the official statistical body of the Eurasian country.

Compared to the month of June, the CPI increased in July by 2.37%, according to figures provided by TÜİK, while compared to the same month last year prices increased by 79.6 %. Even so, the data is lower than the forecast of economists, who had projected an average inflation of 80.5% for the month of July in Turkey.

The largest year-on-year increase in prices was led by transport, where costs increased by 119.11% in the last year, followed by food, where prices shot up by 94.65%. In addition to the war in Ukraine, inflation in Turkey is fuelled especially by the decline of the Turkish lira, which last year lost 44% of its value against the dollar, and so far this year it has already fallen by 27%.

Inflation in Turkey is currently at levels not seen since September 1998 – when it hit 80.4% – as the government insists that the effects of its economic program will begin to pay off soon by driving down prices. Erdoğan himself affirmed this week that prices would reach “adequate levels” in the first months of 2023, although throughout this year he had already predicted several times – wrongly – that inflation would begin to decline this summer.

For its part, the Central Bank of Turkey published last week its inflation forecast for the end of 2022, placing it at 60.4%, more than 22 points above its previous estimate of 42.8%. According to the Central Bank, prices in Turkey will grow by about 90% this fall before starting to decline.