According to official data released on Monday, annual inflation in Turkey reached 78.62 percent in June, the highest rate since 1998. The Turkish Statistical Institute, or TurkStat, released the monthly figures as Turkey's cost-of-living crisis worsened. According to the institute, consumer prices increased by 4.95 percent on a monthly basis.
While consumer prices in many countries are rising, critics blame Turkey's problems on President Recep Tayyip Erdogan's economic policies. The Turkish leader insists that high borrowing costs cause inflation, which contradicts conventional economic wisdom, and advocates for lower interest rates to boost growth and exports.
Turkey's central bank reduced interest rates by 5 percentage points since September, bringing them to 14%, before pausing the cuts in January. Last year, the Turkish lira lost 44% of its value against the US dollar.
The Russian invasion of Ukraine, which caused a spike in gas, oil, and grain prices, has exacerbated the situation in import-dependent Turkey.
According to official data, the transportation sector experienced the greatest annual price increases (123.37%), followed by food and non-alcoholic beverage prices (93.93%). Economists have questioned TurkStat's figures, alleging that the agency is subject to political pressure. Recent dismissals and resignations of senior TurkStat officials have fueled claims of government meddling.