Turkish Inflation Climbs to New 20-Year High

Turkey’s inflation jumped to a new 20-year high on Monday, driven by a weak lira and a surge in energy and food prices, deepening a cost of living crisis for many households.

The Turkish Statistical Institute said that producer prices rose 9.2% through the month, bringing annual inflation to 115%, and energy inflation climbed to 102.9% from 83% in February, driven by a surge in refined products and natural gas prices, despite tax cuts.

“Food prices, which make up roughly a quarter of the consumer basket, rose an annual 70.3%, up from 64.5% during the same period,” the statistic said, adding a core inflation index, which strips out the impact from volatile items such as food, energy and gold, rose to 48.4% from 44.1%

According to the statistics, Turkey’s central bank will hold its next rate-setting meeting on April 14 as the central bank held rates for a third month in March after it slashed 500 basis points in late 2021.

Rising prices are part of an economic crisis exacerbated by the COVID-19 pandemic and also Russia’s invasion of Ukraine has seen a surge in gas, oil and grain prices.

The Turkish government has implemented tax cuts on basic goods and has adjusted electricity tariffs in an effort to soften the blow on households.

 


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