Since May 2021, inflation in Turkey has risen continuously to new record levels month after month. In November, the inflation rate weakened slightly for the first time. However, independent experts assume completely different numbers.
The high level of inflation in Turkey weakened in November for the first time in around a year and a half. Goods and services rose by an average of 84.39 percent compared to the same month last year, according to the statistics office. In October, the inflation rate was still 85.51 percent.
Since May 2021, inflation in Turkey has risen continuously to new record levels month after month. Independent experts, however, assume completely different numbers – although they also see a weakening. According to this, inflation in November could have been as high as 170.7 percent year-on-year, after 185.3 percent in October.
The number one price driver remained the transport costs, which include fuels such as petrol. They increased by 107 percent. Grocery and non-alcoholic beverages rose more than 102 percent. Consumers also had to dig deeper into their pockets for furniture and household appliances: they cost an average of 92.83 percent more than in November 2021. The main reason for the sharp rise in prices is the consequences of the Russian war against Ukraine, which has significantly damaged many raw materials have become more expensive.
However, rising inflation is also closely linked to the weakening lira: the national currency lost 44 percent of its value against the dollar last year, and another 30 percent so far this year
According to economists, one reason for this is the monetary policy of the Turkish central bank. Despite the high inflation, the latter lowered its key interest rate in November into the single digits for the first time in more than two years: it was reduced to 9.0 from 10.5 percent.
President Recep Tayyip Erdogan had previously called for the level to drop to single digits by the end of the year. The central bank began easing its monetary policy more than a year ago. At that time, the interest rate was still 19 percent. This course makes economists shake their heads.
The vast majority of experts recommend combating high inflation with higher interest rates, as the US Federal Reserve and the European Central Bank (ECB) are trying to do. Argentina, where the inflation rate is also more than 80 percent, has now set the key interest rate at 75 percent.
