While Official Figures Claim Turkey’s Inflation Rate Is 85%, Third-Party Stats Say It’s Closer to 200% – Turkey, a transcontinental country in Western Asia, has been struggling financially as a result of the horrible state of the region’s economy. The Turkish Statistical Institute (Tüik) released the official inflation rate data for the country on November 3, 2022, and statistics reveal that the rate hit 85.5% year-on-year.
The cost of living in Turkey has reportedly increased considerably, and the Tüik report reveals that food costs there have increased by 99% year over year. For Turkish residents, housing costs and rent increased by 85%. Turkey’s central bank and president Recep Tayyip Erdogan reduced the region’s benchmark bank rate by 150 basis points (bps) on October 20, 2022.
According to statistics, it was the third month in a row that cuts were made, and Erdogan said in September that interest was the enemy. “My biggest battle is against interest. My biggest enemy is interest,” Erdogan stated in late September. He also noted at the time that the interest rate needs to “come down further” despite the red-hot inflation.
Additionally, Turkey has been asked by the International Monetary Fund (IMF) to increase its benchmark interest rate. According to reports, the IMF sent a group to Ankara and Istanbul to meet with representatives of the public and private sectors in order to find a solution to Turkey’s economic problems.
“Policy rate cuts in late 2021 added to existing vulnerabilities and were followed by lira depreciation and high inflation,” the IMF said. “The mission recommended early policy rate hikes accompanied by moves to strengthen the central bank’s independence.” Such moves would help reduce inflation more durably.
Despite the official inflation figures provided by the Turkish Statistical Institute, independent data reflect a quite different view. According to economists at the Inflation Research Group (Enag), Turkey’s yearly inflation growth is more closely related to 185.5%. The Enag Inflation Index, according to researchers, has dynamic characteristics that adapt more swiftly to changes in Turkish consumption patterns.
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