Inflation in Turkey soars to eye-popping near 70 per cent in April

ANKARA, Turkey

Official data from Turkey showed that inflation in Turkey rose to almost 70% in April. This is due to skyrocketing costs, which eat away at earnings, and make it impossible for many families to afford basic necessities.

The Turkish Statistical Institute saidConsumer prices rose by 69.97% in April relative to the previous year. This is the biggest increase year-over year since 2002. Inflation was 61.14% higher than it was in March.

According to the U.S. Federal Reserve, which is the preferred gauge for measuring inflation, the U.S. saw 6.6% in September. In the 19 euro-using countries, it was a record high of 7.5%. The Fed raised interest rates Wednesday, and the Bank of England will likely do so Thursday.

Turkey’s President Recep Takyip Erdogan’s economic policy favoring lowering interest rates to stimulate growth and exports is being blamed by critics. High borrowing costs are a problem for Turkey, and Erdogan insists they cause inflation. This is contrary to economic theory.

Turkey’s central banks have cut rates by five percentage points, from 14% to September rates, despite high inflation rates — prior to suspending them in January. The Turkish lira lost 44% last year against the U.S. Dollar.

The situation in Turkey, an import-dependent country, has been exacerbated by Russia’s invasion in Ukraine. This led to a spike in oil, gas and grain prices. According to the data, Turkey’s biggest price hikes were in Turkey’s transportation sector at 106% and food and non-alcoholic drinks at 89%.

To ease the burden on households, the government implemented tax cuts for basic goods and adjusted electricity tariffs.

Erdogan said last week that inflation would recede by May and move in a “more favorable” direction at the close of the year.