Turkey’s annual inflation rises to the highest level since 1998

Data on Friday showed that the annual inflation rate in Turkey jumped to its highest level in 24 years, recording 73.5 percent in May, driven by the repercussions of the war in Ukraine, high energy prices, and the decline of the lira, albeit less than economists’ expectations.

Inflation has been rising since last fall when the lira witnessed a sharp decline after the Turkish Central Bank launched a monetary policy easing cycle by cutting interest rates by 500 basis points in the implementation of orders from President Recep Tayyip Erdogan.

The latest inflation figure exceeded a rate of 73.2 percent, which it reached in 2002, the highest level of inflation since October 1998, when inflation at that time reached 76.6 percent, and Turkey was struggling to end chronic inflation that lasted ten years.

But forecasts unanimously agreed by economists indicated that inflation would rise to 76.55 percent.

Despite the sharp rise in annual inflation, Turkish Finance Minister Nureddin Nebti said on Friday that monthly inflation tends to decline.