Economists surprised: Turkish inflation is approaching 20 percent

Economists surprised
Turkish inflation is approaching 20 percent

There should actually be a trend reversal, but contrary to the expectations of economists, the rate of inflation in Turkey is rising steadily. Citizens have to dig deeper and deeper into their pockets, especially for food. An improvement in the overall economic situation is not in sight.

In Turkey, inflation has increased for the third month in a row. The rate is heading towards the 20 percent mark. In August consumer prices rose by 19.25 percent year-on-year, the statistics office said. In July the inflation rate was 18.95 percent and in June it was 17.53 percent.

US dollar / Turkish lira 8.31

Most recently, the inflation rate was above the 20 percent mark in early 2019. Economists were surprised by the development. They had expected the inflation rate to weaken slightly. Compared to the previous month, consumer prices rose 1.1 percent in August.

The increase was driven by food prices. On average, they were 29 percent more expensive than a year ago. The rise in food prices has increased noticeably since June, after the rate of increase had been stable in the previous months. Company producer prices even increased by 45.5 percent in August.

With some delay, the companies’ rising manufacturing costs are likely to have at least some of the impact on general consumer prices. The lower rate of the Turkish lira makes imports more expensive. At the same time, raw material prices are rising worldwide. Inflationary pressures are therefore likely to remain high.

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