More economic misery for Turkey as inflation nears 25%

Bad figures come amid continued concerns over domestic monetary policy

Turkey’s inflation rate rose to nearly 25 per cent in September, official statistics showed yesterday, as the economy suffers further from the Turkish lira’s dramatic fall.

The unexpectedly bad figures come amid continued concerns over domestic monetary policy and the government’s steering of the economy as well as a bitter spat with the US which saw the lira fall by 25 per cent against the US dollar in August.

Consumer prices rose 24.52 per cent in September from the same month last year, up from a 17.9 per cent increase recorded in August, according to the Turkish statistics office (TUIK). The figure is the highest since August 2003, the year President Recep Tayyip Erdogan became premier — a role he held until 2014 before becoming head of state.

The new inflation rate is also significantly higher than the Bloomberg consensus forecast of 21.1 per cent.

Finance Minister Berat Albayrak admitted the figures were higher than expected, but insisted: “We have left the worst behind us.”

Albayrak said he believed “the trend in inflation will break in October.”

But Inan Demir, an economist at Nomura, believes it is “still too early to say that the worst is behind us as pent-up inflationary pressures have built up in categories ranging from fuel to bread”.