ANKARA – Turkey’s annual inflation rate in January reached its highest level since April 2002, official data showed today after a currency crisis decimated people’s purchasing power.
Consumer prices surged by 48.7 percent from the same period in January last year, up from an annual rate of 36.1 percent in December, according to the Turkish statistics agency.
The reading came out just days after President Recep Tayyip Erdogan changed the head of the state statistics agency for the fourth time since 2019.
Turkish media reported that Erdogan was unhappy with agency data showing inflation reaching the highest level since his Islamic-rooted party stormed to power two decades ago, complicating his path to re-election in 2023.
Former agency chief Erdal Dincer had only been in the job for 10 months. He was replaced by Erhan Cetinkaya, who was vice-chair of Turkey’s banking regulator.
Independent data collected by Turkish economists suggested that the annual rate of inflation rose to more than 110 percent in January.
Erdogan staunchly opposes raising interest rates, which he believes cause inflation – the exact opposite of conventional economic thinking.
He admitted on Monday that Turks would “have to carry the burden” of inflation for “some time”.
“God willing we have entered a period where each month is better than the previous one,” he added.
Turkey has suffered from persistently high inflation for years, experiencing two currency crises since 2018.
The second last year came after Erdogan orchestrated sharp interest rate cuts that put them far below the rate at which prices were rising, eroding Turks’ purchasing power and the value of their savings.
This prompted Turks to stock up on gold and foreign currency, resulting in a currency crash that saw the lira lose 44 percent of its value against the dollar in 2021. – AFP, February 3, 2022
