Turkey: Inflation scratches the 50 percent mark

The inflation rate in Turkey, which has already risen massively, continued to rise in January. As the Turkish statistical office announced on Thursday, consumer prices were 48.7 percent higher than in the same month last year. Inflation thus reached its highest level since April 2002. In December 2021 it had already reached 36.1 percent and thus the highest level since October 2002.

The new figures came just days after Turkish leader Recep Tayyip Erdogan sacked the head of the national statistics agency. Erdogan, a declared opponent of high interest rates, replaced the previous head of the authorities, Sait Erdal Dincer, with the former deputy head of the Turkish banking supervisory authority, Erhan Cetinkaya, in the midst of the debate about the rapid increase in the inflation rate on Saturday.

Opposition in Turkey doubts the official figures

Erdogan gave no reason for the dismissal of Dincer. However, this was criticized at the beginning of January after publication of the inflation rate for December. According to media reports, Erdogan accused Dincer of exaggerating the extent of the economic crisis in Turkey. The opposition, however, questioned the official figures on inflation and speculated that the actual increase in the cost of living was at least twice as high.

In any case, the purchasing power of Turks has been significantly weakened and inflation has now become one of the most important issues in Turkish politics. President Erdogan is pursuing a strategy that contradicts conventional economics, as he strictly rejects an increase in key interest rates to curb inflation. Erdogan, on the other hand, would like to boost credit and investment through low interest rates – but this will continue to increase the amount of money in circulation.