Istanbul’s annual inflation soars to 99.9 percent

Istanbul’s annual inflation soars to 99.9 percent
Update: 01 September 2022 21:18
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Istanbul Chamber of Commerce said the annual inflation saw a 24 year high with a monthly inflation rate of 2.29 percent

Retail prices in Turkey’s largest city of Istanbul peaked to an annual rate of 99,91 percent in August, a level not seen since 1998, Istanbul Chamber of Commerce (ICOC) said on Thursday.

According to data analyzed by the ICOC, Istanbul's inflation was 2.29 percent compared to the previous month, 64.9 percent compared to the end of the previous year and 99.91 percent compared to the same month of the previous year.

While the highest monthly increase in retail prices was in expenses in entertainment with 13.99 percent, health expenses increased by 3.99 percent, household goods by 2.74 percent and food by 2.70 percent.

The official inflation rate in Turkey stands at 79,6 percent while an independent Inflation Research Group (ENAG) argues the rate is over 176 percent.

Turkey’s President Tayyip Erdogan recently dismissed the economic impact of high inflation saying “Turkey is the most successful country in turning the global crisis into opportunity” and accusing critics of being “doom-mongers who try to demoralize our people.” 

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, as a recent poll showed that 67 percent of the electorate said that their political approach has changed because of the economic crisis.

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

Last month, Turkey’s Central Bank decreased its policy rate 100 basis points further down to 13 percent saying it aims to drive economic growth and sustain employment amid growing geopolitical risk.

31 of the 37 central banks in the world this year increased interest rates but only Russia, China and Turkey exercised a rate cut.