Turkey hit with soaring prices as inflation nears 80%

The cost of living in Turkey is constantly being increased as an outcome of President Recep Tayyip Erdoan’s innovative economic policies, which has boosted the official cost of inflation to around 80% in the previous month, considered to be the highest level in 24 years.

As per the Statistics Office of Turkey, the range of prices per year increased from 73.5 percent in the month of May to 78.6 percent in June.

The opposing teams and economists contended that the original rate of inflation was around twice as high as the official figure as an outcome of the currently raised price of gasoline and oil.

The minister of treasury and finance, Nureddin Nebati, stated this week that the prices of households will start to fall by the end of the year in an attempt to head off criticism of the government’s economic management.

“We will begin to observe a fall in the rate of inflation which starts in December.” “It is a promise to you and the president,” Nebati stated.

He gave his remarks after the government’s notification of the second lowest wage increase in six months, which raised the payment by 30%, The increase increased the average monthly wage for nearly 40% of employees, from $254 (£209) to $328. As per Erdoan, the problem for Turkey is not inflation. “Our challenge with inflation is very minimal.

“We have a problem regarding the household expenses, which he claimed for the previous month. As per the economists, Turkey’s official numbers obscured a more serious pattern of the rise in prices that indicated no signs of slowing down.

According to ENAG, the percentage price hike is nearly 71.4% since the start of the year 2022. According to the chamber of commerce in Istanbul, Turkey’s capital city, annual inflation is 94 percent.

No one believes the official Turkish statistics anymore, as per Timothy Ash, an economist with BlueBay Asset Management.

There is no single possibility for even a small possible policy solution. Looking forward to the general election, largely regarded as the most challenging of Erdoan’s administration of two decades, the mounting controversy related to the validity of Turkey’s official data is more likely to be a problem causing political issue for the government of Erdoan.  

The leader of the most strong opposition team, Kemal Klçdarolu, falsely accused the official administration of data of “lying” and urged it to “stop committing crimes for President Erdoan’s advantage.”

As per a report published by the Metropol polling corporation on Friday, around 69 percent of the customers believed in the unofficial ENAG figure, whereas only 24 percent did so for the records collected by the government.

The outcome of the European problem regarding loans in 2012 and the US Federal Reserve’s prospect of increasing interest rates in 2013 both had a very important but negative influence on Turkey. Ever since then, its currency has dropped.

The value of the lira was 36p in 2013, in comparison to 4.9p on Monday.   To put a stop to this declination, Erdoan proposed a “new economic model” in 2018, which also included the end of rising prices and dropping interest rates to support economic growth.

The lira dropped to an iconic decline as an outcome of this mission, which was being made in opposition to the idea of its central bank chief, boosting the prices in a nation that is dependent on imported goods, especially energy.

Inflation’s official rate, which was 15 percent at the beginning of 2021, has now been increased to its peak point since the 1998 problem of debts that supported Erdoan in winning the presidency and resulted in a currency crisis.

Since 2018, three leading heads of central banks have been terminated by the President. The value of the Turkish currency has dropped by 20% this year alone.