Prices begin to pinch Turkey again, inflation jumps to nearly 48%

Turkish inflation ended its eight-month deceleration in July, putting it on track for a surge that the central bank only expects to peak closer to the middle of next year.
 

Consumer prices jumped an annual 47.8 per cent, from 38.2 per cent in June, statistics office data showed Thursday. The median forecast in a Bloomberg survey of economists was 46.8 per cent  Monthly inflation reached 9.5 per cent.
 

Price pressures have been building since the lira began to depreciate sharply after May elections won by President Recep Tayyip Erdogan. Adding to risks for inflation, the government also raised taxes on a variety of essential goods and fuel, in part to help pay for costly pledges made in the run-up to the ballot.
 

The inflationary wave that’s washing over the $900 billion economy follows just months after its worst cost-of-living crisis in decades. The International Monetary Fund expects price growth in Turkey to be the world’s fifth-fastest in 2023.
 

“The government’s expansive price and tax adjustments are set to be key drivers of the inflation rate surge. We also expect to see a sizable contribution from the rapid depreciation in the lira following May’s elections.”