Annual inflation in Turkey surges to 85.5 percent

Annual inflation in Turkey surges to 85.5 percent
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Unofficial figure published by independent ENAG group claims a 185.3 percent rise in October inflation, more than doubling the official data

Turkey’s inflation rate accelerated to 85.5 percent last month from 83.5 percent in September, extending to a new 24-year high. 

Annual inflation in October continued to rise for the 17th consecutive month, the official data published by the Turkish Statistical Institute (TUIK) on Thursday showed. 

However according to ENAG, a group of academics calculating consumer price inflation using similar criteria to TUIK, said that the real inflation climbed to 185.3 percent.

Turkey's inflation has surged over the past year after the central bank adopted a rate-cutting policy despite increasing prices. Acting on the orders of President Recep Tayyip Erdogan who insists on low interest rates, the central bank has lowered the benchmark one-week repo rate from 19 percent to 10.5 percent since last autumn. The economists and business groups frequently call on the central bank to reverse course and increase the interest rates. 

Erdogan says rate hikes are against his Islamic beliefs and insists that low interest rates lead to lower inflation, an opinion that jars with conventional economic theory that says higher interest rates slow inflation.

Month-on-month consumer prices rose by 3.54 percent in October, TUIK said. According to ENAG, month-on-month increase was calculated as 7.18 percent.

October inflation was driven by transport prices, which surged nearly 117.2 percent year-on-year, TUIK said. Food and non-alcoholic drinks’ prices jumped over 99 percent.