Inflation in Turkey is continuing to erupt. In October, it climbed to 25 percent – the highest level in 15 years, as the Turkish statistical office announced today. The background is the decline in the national currency lira, which has lost around one third of its value since the beginning of the year compared to the dollar.
For example, imports billed in euros or dollars will become more expensive, fueling inflation. Among other things, the government is fighting against price inflation with extensive tax cuts. Finance Minister Berat Albayrak, the son-in-law of President Recep Tayyip Erdogan, is also demanding price cuts from companies.
Clothes are particularly expensive
In particular, clothing and shoes became more expensive in October, namely by 12.74 percent. Property prices increased by about four percent.
The currency crisis was triggered, among other things, by concern about Erdogan’s too much influence on the actually independent central bank. The president calls for lower interest rates despite high inflation. The central bank had raised the rate to 24 percent in September, but held it down in October. If necessary, she wants to reload. However, it is likely to shy away from that, as this may only intensify the recession, said Timothy Ash of the investment advisor Blue Bay Asset Management.
