Turkish inflation jumps to 85.51 percent in October

Turkish inflation jumps to 85.51 percent in October
Turkey's annual inflation rate has hit another record high of 85.51 percent, as President Erdogan refused to back down on a controversial policy of cutting interest rates.
2 min read
03 November, 2022
The Turkish government is cutting interest rates despite soaring inflation [Getty]

Turkey's annual inflation rate accelerated to 85.51 percent in October, its highest level since 1997, official data showed Thursday, as President Recep Tayyip Erdogan has defended unorthodox policies to combat a cost-of-living crisis.

Central banks worldwide are raising borrowing costs in efforts to tame soaring consumer prices, but Turkey has bucked the global trend, with Erdogan calling higher interest rates his "biggest enemy".

Last month, Turkey's central bank cut its policy rate for a third consecutive time, bringing it down to 10.5 percent from 12 percent.

With an election looming next year, Erdogan argues that high interest rates are the cause of inflation, not the opposite, in defiance of orthodox economic theories.

Consumer prices reached 83.45 percent in September.

On Wednesday, Erdogan praised the state of economy, in an address to his ruling AKP lawmakers in the parliament.

"Thank God, the wheels of the economy are turning," he said.

"Our economic model, which we have summarised as growth through investment, employment, production, export and current account surplus, is bearing fruit."

Many Turks question the credibility of the official government data.

According to a respected monthly study released by independent economists from Turkey's ENAG research institute, the annual rate of consumer price increases reached 185.34 percent in October.