Inflation in Turkey soars to 73.5%

Turkish inflation hit a 24-year high in May amid pressure from skyrocketing food and energy prices. Official data showed on Friday that consumer prices rose 73.5% in year-on-year terms last month, up from 70% in April.

The latest figure surpassed the 73.2% high touched in 2002 and is the highest since October 1998, when inflation reached 76.6%.

Transportation and food costs soared by 108% and 92%, respectively, versus last year, the statistics show.
Inflation in the country has been in double digits for much of the past five years, as the Turkish authorities have prioritized economic growth and exports. Meanwhile, the central bank’s controversial approach of monetary easing despite elevated inflation has resulted in a historic plunge in the national currency, the lira, which has been the worst performer in emerging markets for several years running.

Last year, the lira nosedived 44% versus the US dollar largely due to a number of rate cuts.

The Turkish central bank has refrained from raising the key interest rate this year, which currently stands at 14%. Instead, it has promoted policies aimed at widening the use of the lira and making available long-term investment loans. The regulator will hold its next policy meeting on June 23.

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