ANKARA, Turkey — Annual inflation in Turkey continued to rise in October, official figures showed on Thursday, pushing up the price of essential goods and amplifying a cost of living crisis in the country.
Consumer prices rose 85.51 percent in October from a year earlier, and 3.54 percent from the previous month, the Turkish Statistical Institute said.
The inflation rate was the highest in 24 years.
Experts argue, however, that inflation is well above official figures. The independent inflation research group pegged the annual rate at 185% on Thursday.
While the pandemic and Russia’s invasion of Ukraine have fueled inflation around the world, economists believe that inflation in Turkey has been fueled by President Recep Tayyip Erdogan’s belief that borrowing costs high lead to higher prices. Traditional economic thinking says that raising rates helps keep inflation in check.
Last month, Turkey’s central bank cut interest rates for the third month in a row – to 10.5% – in line with Erdogan’s economic views. Turkey’s president announced further rate cuts to bring the policy rate down to single digits.
In contrast, central banks around the world have raised rates aggressively to combat soaring inflation.
On Wednesday, Erdogan, who is running for re-election in a vote next year, defended his economic policy, saying he expected his model – which prioritizes growth, investment, to employment and exports – bears fruit and is emulated by others.
“As the whole world… grapples with the highest inflation figures in 60, 70 years, the wheels of our country’s economy are turning,” Erdogan said.
“Many institutions, individuals and organizations – from the United Nations to many economists – agree with the causal relationship we have established between inflation and interest rates,” Erdogan said. “After the new year you will see the world…lower interest rates.”