DInflation in Turkey continues to rise. In June, the cost of living increased by 78.62 percent compared to the same month last year, the national statistics office announced on Monday in Ankara. In the previous month, the inflation rate was around 74 percent. Transport services and groceries in particular became significantly more expensive.
Producer prices also continued to rise: they rose by around 138 percent over the year. Compared to the previous month, this is an increase of around 6.8 percent. Producer prices are usually included in consumer prices with a time lag and only partially.
The opposition accuses the government of glossing over the inflation figures and assumes a significantly higher rate. Istanbul-based inflation research group Enag put inflation in June at 175.55 percent year-on-year.
The weak national currency, the lira, has been one of the causes of inflation for a long time. The prices of many commodities are also rising, not least because of the Russian attack on Ukraine.
In the opinion of many economists, the Turkish central bank is not fighting the high inflation with enough determination. In fact, the monetary watchdogs have eased their monetary policy since last summer. According to current economic theory, an increase in interest rates can counteract inflation. Turkish President Recep Tayyip Erdogan, on the other hand, argues that high interest rates cause inflation. The central bank is now following Erdogan’s line and has so far refrained from raising interest rates. It has kept interest rates at 14 percent since January.
Prices are also rising in Switzerland
Global inflationary pressures have not improved Turkey’s position in this regard either. Even in Switzerland, prices are rising to an extent that has not been seen for a long time. In June, the inflation rate exceeded 3 percent for the first time in almost 14 years.
Consumer prices rose surprisingly sharply by 3.4 percent. Above all, fuel, heating oil and various foods have become more expensive. In mid-June, the Swiss National Bank (SNB) surprisingly raised interest rates by half a percentage point to minus 0.25 percent after more than seven years of monetary policy persistence. The currency watchdogs weighted the risk of escalating inflation higher than the disadvantages of a strong Swiss franc for the export-oriented economy. SNB President Thomas Jordan considers a further tightening of monetary policy to be likely due to the ongoing inflationary pressure.