Turkey: Inflation rises to 23 years high by 78.62 percent

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Inflation in Turkey rose year-on-year in June to a 23- year high of 78.62%; it has targetted the local currency (the Turkish lira) and uncertain conditions due to the negative effects of Russia’s military invasion of Ukraine.

The country’s official statistics show that Turkey’s Consumer Price Index (CPI) increased in June by 4.95% compared to May; compared to a year earlier, inflation in June accelerated to 78.62% from 73.5% in May.

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This is the country’s highest inflation since September 1998 and much higher than June 2021 (17.53%).

As a result of a sharp increase in energy prices against the backdrop of the war in Ukraine, the steepest increase in June on an annual basis was in transportation prices (a jump of 123.37%), followed by food and soft drinks (93.93%), furniture and on home appliances (an increase of 81.14%) and on prices in hotels, cafes and restaurants (an increase of 79.55%).

The weakest annual price growth in June was in communications (up 23.74%), clothing and footwear (up 26.99%), education (up 27.78%) and healthcare (39.34%).

Earlier in June, Turkey’s central bank kept its key interest rate unchanged at 14% despite a sharp rise in prices in the country, with the bank again saying it expects inflation to start falling.

At the same time, producer prices (PPI) increased in June by 6.77% from the previous month and increased by as much as 138.11% from June 2021. This is a clear sign that consumer inflation in Turkey will continue to grow strongly in the coming months.

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