Turkey’s inflation rate soars to 73%, hits 23-year high

Turkey’s inflation rate has soared to some 73 percent year on year, unprecedented in over two decades, as Ankara grapples with increasing food and energy costs.

According to Press TV, official data released on Friday showed that in the month of May, prices were 73.5 percent higher compared to a year ago and up from the 70 percent annual inflation rate registered in April.

Transport, food prices, and household furnishings recorded the sharpest rise in annual inflation, with transport costs up by 107.6 percent in May while food followed with 91.6 percent.

Turkey’s inflation rate in May was the highest since 1998 when a diplomatic crisis resulted in a sharp decrease in capital inflows leading to an economic slowdown in the country.

The recent inflation has been linked to the rise in the global price of energy.

The energy price spike is widely attributed to Russia’s special military operation in eastern Ukraine and the COVID-19 pandemic.

Meanwhile, Turkey’s inflation is expected to remain close to 70 percent until the end of 2022.

“A broad-based deterioration in price dynamics, a relatively high trend inflation, and an increase in the exchange rate pass-through point to a more challenging inflation outlook than envisaged by the [Turkish Central Bank’s] latest forecast trajectory,” economists from Citi said in a note ahead of the data release on Friday.

Also, economists link the Turkish Lira’s loss of value against hard currencies due to technical and fundamental factors exacerbating the country’s current soaring inflation rate.

The Turkish Lira now stands at 16.49, from about 6 two years ago, against the US Dollar.

ME