Istanbul’s annual inflation soars to 107.42%

Istanbul’s annual inflation soars to 107.42%
Update: 02 October 2022 14:10
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Istanbul Chamber of Commerce said the inflation in Istanbul increased at a record pace with a monthly rate of 6.06% in September

Retail prices in Turkey’s largest city of Istanbul surged  to an annual rate of 107.42% in September, a level not seen since 1998, Istanbul Chamber of Commerce (ICOC) said on Saturday.

According to data analyzed by the ICOC, Istanbul's inflation was 6.06% compared to August, 74.89% compared to the end of the previous year and 107.42% compared to the same month of the previous year.

Expenses in culture and education was the champion in monthly price hikes with 9.66%. Household goods expenditures increased by 9.54% and clothing expenditures increased by 8.63%.

While the highest monthly increase in retail prices was in expenses in culture and education with 9.66%, household goods increased by 9.54% and clothing by 8.63%.

The official inflation rate in Turkey stands at 80.2% while an independent Inflation Research Group (ENAG) argues the rate is over 181.4%.

Turkey’s President Tayyip Erdogan recently dismissed the economic impact of high inflation saying the inflation was not an “insurmountable economic threat.” 

But Erdogan faces a risk of failing reelection in next year’s presidential elections amid the worst cost of living crisis since decades in Turkey.

Erdogan’s “new economy policy” insists on low interest rates based on his unorthodox theory that “interest is the cause, inflation is the result.” 

Turkey’s Central Bank recently decreased its policy rate 100 basis points further down to 12 percent saying it aims to drive economic growth and sustain employment amid growing geopolitical risk.