Turkey, inflation, prices

Prices in Turkey rose above 21% in November

Food and energy triggered inflation in November to 21.31%, the highest price increase in Turkey in 3 years.

Prices in Turkey reached their highest increase in the last 3 years in November, with an increase of above 21% compared to the same month last year, according to the latest official data published today by the Turkish Statistical Institute (TÜİK).

The report published this Friday by TÜİK indicates that inflation rose in November to 21.31%, the highest figure since November 2018, surpassing the 20% barrier after inflation reached 19.89% in October. With respect to that month, the Consumer Price Index (CPI) rose 3.51%, according to data from the institute.

The main price increase compared to last year was in food (27.11%), but also in restaurants and hotels, reflecting the increase in demand due to the end of many restrictions imposed due to the pandemic. Furniture and home furnishings experienced an increase of 25.14% on an annual basis. However, the rise in the price of energy stands out, since its cost increased in the last year by 32.14%.

Compared to October, however, costs increased mainly in transport (precisely because of the rise in fuel prices), with a 6% rise in November compared to the previous month. Goods and services increased by 5.36%, while in restaurants and hotels prices grew by 4.6% during the last month.

The Central Bank governor assures that inflation is temporary

The high inflation and the weakness of the Turkish lira in the markets this week led the Turkish Central Bank to intervene for the first time since 2014, selling part of its reserves in foreign currencies to support the national currency, since Turkish lira has lost more than 30% of its value so far this year, and is already trading at a rate of 15.5 Turkish liras for each euro. Despite this, the Central Bank has not stopped cutting interest rates, backed by Erdoğan’s own bet to maintain a low interest policy in Turkey to stimulate the economy.

Despite high inflation rates and rising prices in Turkey last November, the governor of the Turkish Central Bank, Şahap Kavcıoğlu, stated yesterday that the rise in inflation is only a temporary effect. “When the rise in prices of goods, and the factors caused by the supply chain, disappear, inflation will be reduced,” said Kavcıoğlu, assuring that Turkey will see the benefits of the current monetary policy during the first half of 2022.