With presidential and parliamentary polls less than a year away, Turkey’s government has bet on growth to contain popular grievances, but runaway inflation and a foreign-currency crunch is producing deeper poverty.

Consumer prices in Turkey rose 1.46% from July to August, official data showed Monday, with annual inflation surging to a 24-year high of 80.21%.

Inflation has soared since September 2021 amid the slump of the Turkish lira, fueled by unorthodox rate cuts by the central bank. The surge in global energy and commodity prices after Russia’s invasion of Ukraine in February has only made matters worse.

Heralding further inflationary pressures, the Turkish authorities announced fresh price hikes on gas and electricity on Sept. 1 — around 20% for households and around 50% for enterprises.

Energy expenses are a major item in the housing category of the inflation basket, in which prices rose 2% in August, bringing the annual rate to nearly 72%.

Food prices rose around 0.9% in August, with annual food inflation reaching 90.3%. The price of bread alone — an indispensable staple for low-income consumers — rose more than 101% over a year.

The recent relative easing in global energy prices resulted in partial reductions in gasoline and diesel prices last month, contributing to a 1.8% decline in prices in the transportation group. Nevertheless, annual inflation in this category stood at a whopping 117%.

The prices of durable goods such as furniture, whiteware and electronic appliances rose 3.3% in August. The months-long uptick brought annual inflation in the sector to over 92%.



Written by Mustafa Sönmez