Inflation in Turkey hits highest level in two decades at 78.6%

ANKARA, July 4 (Xinhua) — Turkey’s annual inflation jumped to 78.62 percent in June, its highest level since 1998, the Turkish Statistical Institute said on Monday.

He said consumer prices rose 4.95% month-on-month in June.

The highest annual price increase was recorded in the transport sector with 123.37%. The cost of food and non-alcoholic beverages increased by 93.93%, while prices for furniture and household equipment rose by 81.14%, according to official statistics.

The national producer price index climbed 6.77% month on month in June, with an annual increase of 138.31%.

Turkey’s annual inflation was 73.5% in May.

The country is experiencing financial difficulties not seen in decades, with the Turkish lira losing value since the COVID-19 pandemic. The Russian-Ukrainian conflict has also aggravated the situation, pushing energy prices to new heights.

The lira lost more than 40% of its value in 2021, as the central bank cut its key rate by 500 basis points to 14% from 19% from September to December despite high inflation. The bank has kept the same rate since then.

After the dramatic fall of 2021, the lira continues its downward trend and has lost more than 20% of its value against the US dollar in the past six months.

Turkish President Recep Tayyip Erdogan is a proponent of low interest rates, insisting the move will ease the investment burden amid rising inflation.

Economists have predicted that Turkey will live with high inflation throughout 2022.

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