Turkey’s consumer price inflation rate climbed to 80.2 percent last month, extending the highest level since 1998, after the central bank unexpectedly cut interest rates.
Inflation accelerated from 79.6 percent in July driven by transport costs and the price of food and household goods, the Turkish Statistical Institute said on Monday. On a monthly basis, prices rose by 1.46 percent.
The so-called core inflation rate rose to 66.1 percent from 61.7 percent in July. The measure excludes more volatile items such as energy, food, beverages, tobacco and gold.
Turkey is prioritising economic growth over the battle against inflation ahead of presidential and parliamentary elections scheduled for June next year. Last month, the central bank, acting on government orders, shocked investors by cutting the benchmark interest rate to 13 percent from 14 percent.
Annual inflation was expected to accelerate to 81.2 percent last month, according to the median estimate in a Reuters poll of 10 institutions published last week.
Producer price inflation slowed to 143.8 percent from 144.6 percent in July, the institute said.
The central bank’s lax monetary policy has provoked a slump in the lira, stoking inflation. The bank began cutting interest rates from 19 percent in September last year, pausing in December and keeping them steady until last month’s reduction. The lira fell by 44 percent against the dollar last year and has lost more than a quarter of its value in 2022.
The lira was trading almost unchanged at 18.22 per dollar after the inflation data was published.