Turkey’s annual inflation rose to 78.6% in June, as the cost of food and transportation continue to skyrocket. This is the country’s highest annual increase in 24 years.
The country has suffered through widespread inflation in the past few months, and has seen its currency, the lira, fall by almost 20% against the dollar year to date. According to data from the Turkish Statistical Institute, the cost of food has almost doubled in the last year, while cost of transport went up by 123%.
While the cost of rising consumer goods has been felt worldwide, especially with the ongoing unprovoked onslaught of Russia in Ukraine, Turkey is also feeling the effects of President Recep Tayyip Erdogan’s rather radical economic policies. In September, while the rest of the world is increasing interest rates to tame inflation, Turkey has done almost the opposite and kept their interest rates at 14% since December.
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The president justifies this policy by arguing that lower rates will bring down inflation and help increase production and exports.
Additionally, Erdogan’s administration has also announced a minimum wage hike of 30% starting in July, after announcing a 50% hike six months ago. This move, defended as the government taking action to protect people from rising prices, could cause the country to fall into a wage-price spiral and make the situation more dire.
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