Inflation in Turkey hits 54%, adding to cost of living issues

ANKARA, Turkey (AP) — Turkey’s annual inflation rate accelerated further in February, official data showed Thursday, marking the biggest jump since 2002 and adding pressure on already struggling households to buy basic products.

The Turkish Statistical Institute said consumer prices rose 54.44% in February from a year ago. That’s up from almost 49% in January.

By comparison, annual inflation rose a record 5.8% in the 19 countries that use the euro in February and 7.5% in the United States in January — the fastest pace in 40 years. .

In Turkey, the highest annual price increase was recorded in the transport sector, at 75.75%, while the increase in food prices was 64.47%, according to the data.

Turkish consumers have been hit by rising prices following a series of interest rate cuts last year that sparked a currency crisis.

President Recep Tayyip Erdogan strongly opposes high borrowing costs, insisting they cause inflation – a position that contradicts established economic thinking.

Turkey’s central bank has cut rates by 5 percentage points since September, to 14%, despite high inflation rates – before suspending them in January and February. The Turkish lira lost 44% of its value against the US dollar last year.

In a bid to provide some relief, the government last month cut the value added tax on staple foods to 1% from 8% previously.

It also introduced a package of measures to reduce soaring electricity bills, including readjusting the level below which higher electricity tariffs for households and some more energy-using businesses come into effect.

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Sharon P. Juarez