Turkey’s inflation around 8-9 percent if last years not counted, trade minister says

Turkish Trade Minister Mehmet Mus said ruling Justice and Development Party (AKP) reduced the country’s inflation rate to around eight-nine percent, should the last couple of years are excluded from the calculations.

“During the AKP rule, we kept inflation at single-digit levels. If you do not count the last years, the average rate is around 8-9 percent,” Mus said in an address to his party members in Eastern Bingol province, Diken reported on Monday.

Turkish consumer price inflation accelerated to 83.45 percent in September, extending the highest level in 24 years, according to official data.

Turkey’s inflation has surged after the central bank cut interest rates late last year despite soaring prices. Acting on the orders of President Recep Tayyip Erdogan who insists on low interest rates, has lowered the benchmark one-week repo rate from 19 percent to 10.5 percent since last autumn.

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.

Mus, who attributed the recent increase in inflation entirely to the negativities experienced in the region and the world, said “Turkey is a country that has managed to maintain its economic growth despite the instability around it.”

Turkish lira lost around 44 percent of its value in 2021, and a quarter more in the first half of this year, after the central bank cut interest rates.