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Turkey's annual inflation climbs to near 79%

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
A money changer holds Turkish lira banknotes at a currency exchange office in Ankara, Turkey October 12, 2021. (Photo by Reuters)

Turkey's annual inflation rate has jumped to a 24-year high of 78.62% in June, data showed, just above forecast, driven by the impact of the Ukraine war, soaring commodity prices and a slide in the lira since a December crisis.

Inflation has surged since last autumn, when the lira slumped after the central bank gradually cut its policy rate by 500 basis points to 14%, in an easing cycle sought by President Tayyip Erdogan to boost economic growth.

The latest figures showed consumer prices rose 4.95% in June, compared to a Reuters poll forecast of 5.38%. Annually, consumer price inflation was forecast to be 78.35%.

June consumer price inflation was driven by transportation prices, which surged 123.37%, and food and non-alcoholic drinks prices, which jumped 93.93%, the Turkish Statistical Institute data showed on Monday.

It was the highest annual inflation reading since September 1998, when annual inflation hit 80.4% and Turkey was battling to end a decade of chronically high inflation. The lira was unchanged at 16.78% after the data.

Inflation has been further stoked this year by the economic fallout from Russia's offensive in Ukraine.

The lira currency shed 44% against the dollar last year and is down 21% this year.

The domestic producer price index climbed 6.77% month-on-month in June for an annual rise of 138.31%.

(Source: Reuters)

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