Inflation does not only affect French households, and the curves still do not fall. Inflation reached 58.9% year on year in August in Turkey, the highest since December 2022, according to official data released on Monday. Consumer price inflation, fueled by the depreciation of the Turkish lira, stood at 9.1% over one month. Inflation accelerated again in July, to 47.8% over one year, after eight months of decline.
Price inflation had fallen to 38.2% year on year in June, its lowest level in a year and a half, after peaking at 85.5% in October 2022. Although high, the official figures are disputed by economists independent of the Inflation Research Group (Enag), according to which the increase in consumer prices amounts to 128% year-on-year.
An unbearable cost of living
The Turkish Central Bank, which has raised its main key rate from 8.5% to 25% since June in order to stem inflation, had revised its forecasts for the end of the year at the end of July. According to her, inflation will reach 58% at the end of 2023, before a return to “stability” from 2025. “We know that the fight against inflation will take time. We are in a period of transition. We will do whatever is necessary (monetary tightening, credit policy and income policies) to control inflation and then bring it down,” Turkish Economy Minister Mehmet Simsek said Monday on X (ex-Twitter). .
“Pretty terrible inflation numbers. This will increase the pressure on (the central bank) to further increase its key rate significantly,” said Timothy Ash, analyst at BlueAsset Management.
But Turkish President Recep Tayyip Erdogan, who after his re-election at the end of May appointed a new Minister of the Economy and a new Governor of the Central Bank, could oppose such an increase. Turkey has been experiencing continuous double-digit inflation since the end of 2019, making the cost of living unbearable for many families.