Inflation in Turkey jumps past 70 percent, hitting 24-year high
An unorthodox economic policy based on sharp interest rate cuts has seen skyrocketing prices of transportation and food
By News Desk - June 03 2022

(Photo credit: Al-Jazeera)

Official data released on 3 June showed that Turkey’s inflation rate rose to a 24-year high of 73.5 percent in May as a result of soaring energy prices, a collapse of the Turkish lira, and the impact of the Ukraine conflict.

According to the Turkish Statistical Institute (TurkSat), the country’s consumer price index (CPI) rose from just under 70 percent in April, up to 73.5 percent in May.

The cost of food and transportation increased by 92 percent and 108 percent, while month-on-month consumer prices rose by 2.98 percent, TurkSat reported, making it difficult for people to afford basic commodities one year ahead of general elections.

The conflict in Ukraine has also affected the Turkish economic crisis, causing an increase in the cost of gas, oil, and grain in the import-dependent country.

Last year, the Turkish lira began its collapse due to a series of aggressive interest rate cuts, in line with President Recep Tayyip Erdogan’s opposition to high borrowing costs, which left the country more exposed to global price shocks.

By the end of 2021, the Turkish lira had lost around 44 percent of its value against the dollar. In January, Turkey’s inflation rate reached its highest level since 2002, according to official data.

Since September, the Turkish lira shed nearly 50 percent of its value against the US dollar. The drop in currency has resulted in a sharp rise in import costs for companies and households.

According to opposition leaders, the government of Erdogan has put pressure on the statistics agency to downplay the surge in prices, in order to sway political support ahead of the 2023 general elections.

Electoral polls also reflect dwindling support for the Turkish president ahead of the upcoming elections, as a result of recent economic strains.

Moreover, the country recently raised natural gas and electricity prices for the second time this year, resulting in further pressure on an already battered economy.

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