inflation jumped to 48.7% in January, its highest level since 2002

Inflation no longer seems to want to stop. Consumer price inflation in Turkey reached 48.69% year on year in January, the highest figure since April 2002 due to the collapse of the Turkish lira in 2021, according to official figures published on Thursday (February 3rd). In December, consumer price inflation reached 36.08% year-on-year.

Inflation has become a hot topic in Turkey less than eighteen months from the next presidential election. The opposition and some Turkish and foreign economists accusing the National Statistics Office (Tüik) of underestimating its magnitude by more than half. President Recep Tayyip Erdoğan, accused of encouraging higher prices by pushing the Turkish central bank to cut interest rates almost systematically in recent months, promised in January to “bring inflation back to single digits as soon as possible”.

Contrary to classical economic theories, the Turkish president believes that high interest rates promote inflation. To justify his policy of “low rate”, he repeatedly advanced the precepts of Islam, which prohibits usury. The Turks will have to “carry the burden” more inflation “some time”warned the Head of State on Monday, affirming however that“with God’s help we have entered a period where each month will be better than the previous one”.