Turkey’s annual inflation climbed to a fresh 24-year high of 80.21 percent in August, a bit below expectations according to official data, after the central bank unexpectedly cut interest rates and stoked a cost-of-living crisis, Reuters reported on Monday.
Inflation became higher when the Turkish lira slumped after the central bank cut its policy rate by 500 basis points to 14 percent.
Inflation is expected to not expected to fall in the next few months, however, the bank lowered its key rate by 100 basis points last month to 13 percent, indicating “economic slowdown,” Reuters said.
Consumer prices rose 1.46 percent month-on-month, the Turkish Statistical Institute said. Annual consumer price inflation was forecast to be 81.22 percent.
Highest annual inflation was seen in transportation as prices rose 116.87 percent year-on-year, despite a drop in prices.
Prices in the sector dropped by 1.78 percent month-on-month.
In the key food and non-alcoholic drinks’ sector prices jumped 90.25 percent, Reuters said, adding the data had “little impact on the lira , which traded at 18.2250, unchanged from its early levels.”
The Ukraine-Russia conflict has also affected inflation this year.
The government has said inflation will fall with its economic programme prioritising low rates to boost production and exports with the aim of achieving a current account surplus, Reuters said, adding “Turkey expects inflation to ease to 65 percent by end-year,” according to government forecasts on Sunday.
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