Turkiye Inflation Reaches 85.5 Percent, Highest Since 1998, Food Prices Soar 99 Percent

Turkiye Inflation Reaches 85.5 Percent, Highest Since 1998, Food Prices Soar 99 Percent

Turkiye's annual inflation hit 85.5 percent in October, the highest since June 1998. 

Reporting from CNBC, Thursday (11/3/2022), food prices in Turkiye jumped 99 percent compared to the same period last year. 

In addition, housing prices were 85 percent more expensive and transportation costs soared to 117 percent, reports the Turkiye Statistical Institute. 

The domestic producer price index showed an increase of 157.69 percent annually and an increase of 7.83 percent on a monthly basis. 

The rising cost of living in this country of 85 million has continued for almost two years, along with a significant devaluation of the Turkiye currency, the lira. 

On the other hand, Turkish President Recep Tayyip Erdogan refuses to raise interest rates, insisting that raising interest rates will hurt the economy. 

Economists and critics say Erdogan's policies continue to make the lira miserable and boost inflation, fueling a currency crisis. 

On October 20, Turkiye's central bank cut its key interest rate by 150 basis points for the third month in a row, from 12 percent to 10.5 percent. At that time, Turkiye inflation was 83 percent. 

Erdogan said cutting interest rates was a pro-growth decision. 

In fact, Erdogan remains determined to lower the country's interest rates to single digits by the end of this year. 

“My biggest battle is against flowers. We lowered the interest rate to 12 percent," Erdogan said at an event in late September. 

“Is that enough? This is not enough. This needs to be lowered further," Putin continued. 

Liam Peach, senior economist at London-based Capital Economics, said the Turkiye central bank would continue to be under Erdogan's pressure.