Turkey's inflation rate hit a fresh two-year high of 19.25 percent year-on-year in August, exceeding the country's key interest rate of 19 percent, leaving the Central Bank in a tricky situation amid President Recep Tayyip Erdoğan’s calls for a rate cut.
The Turkish Statistical Institute (TÜİK)'s announcement on Sept. 3 brought the real interest rate into a negative territory.
Erdoğan had previously said that “interest rates will go down starting in August,” yet with the latest data on the inflation rate, the president's forecast will be brushed aside for the time being.
According to the TÜİK's data, the food and non-alcoholic beverages showed the greatest year-on-year price rise with 29 percent, marking the largest increase since April 2019.
Food and non-alcoholic beverages were followed by furnishings and household equipment with 22.91 percent, and transportation with 21.76 percent.
Meanwhile, monthly inflation also climbed 1.12 percent in August over the previous month, in parallel with expert predictions.
The median of estimates for August by the economists had been a rise of 0.72 percent compared to the previous month.
TÜİK noted that the only monthly decreases in consumer prices were recorded in clothing and footwear with 3.08 percent and transportation with 0.77 percent.
The highest monthly rise was in food and non-alcoholic beverages with 3.18 percent; hotels, cafes, and restaurants with 2.27 percent; and furnishings and household equipment with 1.38 percent.
Turkey's Central Bank forecasts that the country's inflation will hit 14.1 percent at the end of the year.