The inflation rates have reached record highs of the past nine years, placing an additional burden on a flagging and struggling economy strained by high unemployment and weak lira against the U.S. dollar.
Consumer Price Index (TUFE) moved up 2,08 percent last October while Producer Price Index (PPI) saw 1,71 percent increase, the Turkish Statistics Institute (TUIK) said in its monthly release of inflation reports. The annual inflation rate became 11,9 percent in consumer price indexes, while it advanced to 17,28 percent for domestic producer price index, marking a sharp increase for the inflation in general.
With these new stats, the annual inflation rates became the highest of the last nine years, while core inflation reached to the top point never seen in past 14 years.
Prime Minister Binali Yildirim lamented about the figures, but he ascribed the blame on foreign powers seeking to undermine Turkish economy.
“Some countries are trying to place restrictions on us, but we do not follow such a policy. At the moment our determination continues for the national defense industry,” Mr. Yildirim said about his government response to the inflation reports.
“The inflation is a result. Now the number is 11.9 percent, higher than our expectations,” the prime minister noted. He also cited regional upheaval as the driving force for the bleak picture about high prices.
He said his government would work hard next year to reduce the inflation to single digits again, and pledged to share details of their projects with citizens over how to battle with the soaring inflation.
The inflation report announcement came at a time as Turkish lira is weakened against the U.S. dollar and Euro. Turkish lira tumbled against the U.S. dollar with one dollar equaling to 3.90 Turkish lira at one point in Istanbul Stock Market, while the Turkish currency hit an all-time-low of 4.5052 against Euro.
The Central Bank renewed its forecast for the annual inflation rate for the end of this year as 9,8 percent in what seems to be an acknowledgment of troubling signs for the economy.
According to NTV news channel, the sharpest increase in prices for consumer goods took place for women’s sweater with 37,92 percent rise, while prices plummeted for weekly tours in national tourism with demands faltering. The prices edged down 27,12 percent with fewer people embarking on seasonal tours in Turkey.
CPI is an indispensable inflation guide for understanding the Turkish economy. CPI figures are seen as the best way to measure inflation, which is critical to investors and policymakers. Inflation has a profound impact on interest rates, business world, investors and government policies, guiding political actors to formulate their economic policies accordingly.