The inflation rate in Turkey soared 79% on a year-over-year basis in June, its highest level in 24
years.
The annual inflation rate stood at 78.62% in June, according to the Turkish Statistical Institute,
surpassing the forecasts of economists. On a monthly basis, the inflation rate increased 4.95%
in June from May.
Soaring consumer prices have hit Turkey’s 84 million citizens hard due to the Russia-Ukraine
war, high energy and food prices, and a depreciation in the Lira, the country’s currency.
Transportation prices increased 123.37% in June from a year ago, and food and non-alcoholic
beverage prices rose 93.93% on an annualized basis, according to the government data.
Despite the rapid rise in consumer prices, Turkish President Recep Erdogan has refused to
raise interest rates, saying that higher rates are the “mother of all evil.”
Erdogan has instructed the country’s central bank to repeatedly slash interest rates in 2020 and
2021, even as inflation continued to rise.
Central bankers who have opposed Erdogan’s instructions have all been fired. Turkey’s central
bank has had four different governors in the past two years.
The country’s benchmark interest rate currently stands at 14%. The lira fell 44% against the
U.S. dollar last year and is down 21% against the greenback so far in 2022.
