Inflation in Turkey is approaching 50% as the overheated economy puts pressure on consumers
While the Bank of England struggles with rising costs, inflation plagues Turkey.
Inflation reached nearly 50 percent in July as an overheated economy put pressure on consumers, according to the Turkish Statistical Institute.
Consumer prices rose by 47.8 percent last month, a sharp increase from 38.2 percent in June.
Currently at the height of the Turkish summer – hotels and restaurants posted the biggest increases in July, with an 82.6 percent increase. Food costs rose by 61 percent.
Turkey is still in the middle of a cost-of-living crisis, even as the new economic team that President Recep Tayyip Erdogan appointed in June continues to phase out unconventional policies that have been in place for years.
Under pressure: Turkish consumer prices rose 47.8% last month, a significant increase from the 38.2% recorded in June. In the photo: a street vendor in Istanbul
Under new finance minister Mehmet Simsek, Turkey has abandoned its costly defense of the lira and has dropped by a quarter against the euro since late May.
Simsek has raised taxes on a wide range of goods and services, including a 200 percent increase in gasoline excise taxes, to cool demand and replenish government coffers.
Central bank chief Hafize Erkan predicted last week that inflation would reach 58 percent this year, fall to 33 percent by the end of 2024 and 15 percent next year.
But many economists worry that Erdogan, an opponent of high borrowing costs, will not allow the central bank to raise interest rates to a level sufficient to cool inflation.