Inflation in Turkey continues to rise. In June, the cost of living increased to 78.62 percent compared to the same month last year, as the national statistics office announced on Monday in Ankara. In the previous month, the inflation rate was around 74 percent.
Transport and groceries in particular rose significantly in June on an annualized basis. Producer costs also continued to rise: according to the statistics office, the prices that producers receive for their goods rose by around 138 percent in June over the year. Compared to the previous month, this is an increase of around 6.8 percent. Producer prices are usually included with a delay and in some cases in consumer prices.
The opposition accuses the government of glossing over the inflation figures and assumes a significantly higher rate. The Istanbul-based inflation research group Enag even put inflation for June at 175.55 percent year-on-year.
The inflation rate in Turkey is driven by several factors. The weak national currency, the lira, has been causing prices to rise significantly for a long time, as it makes goods imported into Turkey more expensive. The prices of many raw materials are also rising, not least because of the Russian attack on Ukraine.
In the opinion of many economists, the Turkish central bank is not fighting the high inflation with enough determination. In fact, the monetary authorities have eased their monetary policy since last summer. According to current economic theory, an increase in interest rates can counteract inflation. Turkish President Recep Tayyip Erdogan, on the other hand, argues that high interest rates cause inflation. The central bank is following Erdogan’s line and has so far refrained from raising interest rates. It has kept interest rates at 14 percent since January.