Turkish inflation surged past 85% in October, its highest level since 1997, official data showed. Central banks worldwide are raising borrowing costs in efforts to tame soaring consumer prices, but Turkey has bucked the global trend, with Erdogan calling higher interest rates his biggest enemy. Last month, Turkey central bank cut its policy rate for a third consecutive time, bringing it down to 10.5% from 12%. With an election looming next year, Erdogan argues that high rates are the cause of inflation, not the opposite, in defiance of orthodox economic theories. Turkey inflation has steadily risen since reaching a low of 16.6% in May 2021. It hit 85.51% in October, according to state statistics agency TUIK, up from 83.45% in September. Independent economists, however, say the rate is more than twice as high.

At the same time, the Turkish lira has plunged against the dollar. Despite soaring consumer prices, Erdogan praised the state of the country economy in an address to his ruling AKP lawmakers in parliament. Thank God, the wheels of the economy are turning, he said. Our economic model, which we have summarised as growth through investment, employment, production, export and current account surplus, is bearing fruit. The head of the central bank, however, has said that success could not be declared. We cannot consider ourselves very successful in the fight against inflation, central bank governor Sahap Kavcioglu said last month.

If there is inflation, there is a problem, it is not right to talk about success there, we know the distress of the citizens very closely, we take measures, we believe that we will see the result in a very short time,he added. The October surge was fuelled by a 117% rise in transportation prices and a 99% jump for food. According to a respected monthly study released by independent economists from Turkey ENAG research institute, the annual rate of consumer price increases reached 185.34% in October. Opposition leader Kemal Kilicdaroglu accused the government of hiding the real inflation while setting public employees salaries. Why does TUIK (statistics agency) disguise the real figure? he asked last month.

Credit: Independent News Pakistan-INP