Inflation in Turkey jumped to 36.08% in December from its base, to the highest level in September 2022, due to the dip of the pound, according to data announced on Monday.
On a monthly basis, consumer prices rose 13.58%, according to the Turkish Statistics Service, amid problems in a Reuters survey of a monthly increase of 9% and an increase of energy of 30.6%.
The Turkish currency traded at 13.6 pounds against the dollar, falling 3%, but recovered from the low of 13.92 dollars it had reached earlier. In 2021, the pound lost 44% of its value after falling sharply in November and December.
The producer price index rose 19.08% on a monthly basis in December and 79.89% on a main basis, reflecting the explosion in import prices due to the dip in the pound.
The rise in consumer prices is the largest since September 2002, when it had reached 37%, shortly before the rise of President’s AK Party, Recep Tayyip Erdogan, to power in November of that year. Forecasts for 13 finances ranged from 26.4% to 37.3%.
At the peak of the price increases were the prices related to transport, the prices jumped by 53.66% on a basic basis, while the prices of food and beverages jumped by 43.8%.
“This reflects a vicious cycle of demand-driven inflation, which is very dangerous, because the central bank had implied that the inflationary pressures came from restrictions and that it could not do anything about it,” said a Spinn executive. . Consulting in Istanbul, adding: “Interest rates must be raised immediately and aggressively. “Annual inflation will probably reach 40-50% in March.”
Inflation has been hovering around 20% in recent months, driven by the pound falling to a record low after the central bank cut its key interest rate by five percentage points since September under pressure from Erdogan.
The pound fell to a record low of 18 18.4 per dollar in December, only to recover after government interventions in the market and Erdogan’s announcement of a plan to protect pound deposits from fluctuations.