Turkey’s annual inflation stands at 115 pct, independent research group says

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An independent group of academics and economists working on key data that map economic performance has said it calculated Turkey’s rate of inflation in January at 114.87 percent, far higher than the officially announced figure, local media reported on Thursday.

According to the Inflation Research Group (ENAG), the country’s month-on-month consumer prices rose 15.52 percent, while annual inflation jumped to 114.87 percent in January.

Soon after ENAG announced its inflation data, the Turkish Statistical Institute (TurkStat) also on Thursday officially announced the country’s consumer price figures.

TurkStat said Turkey’s annual inflation surged to 48.69 percent in January, the highest figure the country has seen since President Recep Tayyip Erdoğan’s ruling Justice and Development Party (AKP) came to power in 2002.

Month-on-month, consumer prices rose 11.1 percent last month, TurkStat also said.

ENAG started calculating economic figures amid rising suspicion of manipulation of Turkey’s official economic data by the AKP government.

Trust in official figures, mainly the inflation and unemployment rates, has deteriorated since the switching of the country’s parliamentary system to an executive presidency in 2018.

Turkey’s rate of inflation in December was also far higher than the officially announced figure, according to ENAG, which had said it calculated the rate at 82.81 percent rather than 36.08 percent as announced by TurkStat.

The figures are the result of a series of unorthodox interest rate cuts and a crash in the lira currency late last year, Reuters said on Thursday, adding that the producer price index soared 10.45 percent month-on-month in January for an annual rise of 93.53 percent, in a reflection of the foreign exchange-related turmoil of recent months.

The Turkish lira lost 44 percent of its value against the dollar last year, with the losses accelerating at the end of 2021, when Erdoğan’s aversion to interest rates led to a series of sharp rate reductions.

Erdoğan has gone against orthodox economic thinking as part of a “war of economic independence,” arguing repeatedly that high rates push up inflation.

The dollar had soared to a historic high of nearly 18.4 lira by the time Erdoğan announced new currency support measures in late December.

The exchange rate has since slipped back down to around 13 lira to the dollar. A dollar was worth 7.4 lira at the start of 2021.

The embattled president vowed in December to rein in the inflation decimating Turks’ purchasing power, while economists claim the promise is highly unlikely to come true.

Source: Turkish Minute

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