Turkey's inflation stays at 80% in economic crisis

ISTANBUL: Turkey’s official inflation rate barely changed on Monday in a sign that a year-long crisis that has seen prices soar by 80 percent may finally be starting to ease.

The TUIK state statistics agency said that consumer prices rose by 80.2 percent in August from a year earlier.

The figure was fractionally higher than the 79.6 percent reported in July and only a small bump up from the 78.6 percent reading in June.

Turkey’s prices have been steadily rising since a low of 16.6 percent in May 2021.

The strategically important developing nation lurched into its latest economic crisis when President Recep Tayyip Erdogan launched an unorthodox experiment that attempted to fight inflation by lowering the main interest rate.

Conventional economic theory embraced by almost every other big nation pursues the exact opposite approach.

But Erdogan argues that higher interest rates contribute to price increases by making borrowing more expensive for businesses.

The president also says that charging interest violates Islamic rules against usury.

The central bank said over the weekend it expects the inflation rate to fall to 65 percent by the end of the year.

Erdogan himself says prices will only start falling in January.

The crisis has seen the ruling party’s approval ratings drop to historic lows heading into the next general election due by June 2023.