Turkish annual inflation climbed to a new 24-year high of 85.51% in October, official data showed on Nov. 3, slightly below forecast, after the central bank cut its policy rate despite the surging prices.
Inflation has surged since last November, when the lira slumped after the central bank began cutting its policy rate in an easing cycle long sought by President Recep Tayyip Erdoğan, running counter to the global tightening cycle.
In the last three months, the central bank slashed its policy rate by a total of 350 basis points to 10.5%, and promised another cut next month as the final move in the current easing cycle.
Erdoğan, who holds sway over the bank's decisions, has called for a single-digit policy rate by year-end.
Month-on-month, consumer prices rose 3.54%, the Turkish Statistical Institute said, below 3.60% forecast in a Reuters poll. Annually, consumer price inflation (TRCPIY=ECI) was forecast to be 85.60%.
According to unofficial data from the ENAG Inflation Research Group, an independent institution set up in 2020 to track the country’s inflation, Turkey’s annual consumer price inflation rate was 185.34% in October, far higher than official claims. ENAG also said that prices in Turkey increased by 7.18% percent month-on-month in October.
ENAGrup Tüketici Fiyat Endeksi (E-TÜFE) Ekim ayında %7.18 arttı.— ENAG (@ENAGRUP) November 3, 2022
E-TÜFE’nin son 12 aylık artışı %185.34 gerçekleşti.
The annual inflation in October was the highest since June 1998, when Turkey was working to end a decade of high inflation.
Month-on-month the clothing group led the price rises with 8.34%, followed by food prices, which rose 5.09%, and furnishing and household equipment prices, which rose 4.38%.
Transportation, which includes petrol prices, led the annual rise with 117.15%, followed by food prices at 99.05% and furniture and household equipments at 93.63%.
The median forecast for year-end inflation in the latest Reuters poll was 70.25%, while Turkey's central bank raised its year-end forecast to 65.20% last week, its fourth upward revision this year.
The government's economic programme prioritises low rates to boost production and exports with the aim of achieving a current account surplus.
The domestic producer price index was up 7.83% month-on-month in October for an annual rise of 157.69% (TRPPIY=ECI).