A man looks at a butcher shop window in Ankara, Turkey February 16, 2022. REUTERS/Cagla Gurdogan
ISTANBUL, July 29 (Reuters) – Turkey’s inflation is expected to near 81% in July and was seen declining to just 70% by end-2022, a Reuters poll showed on Friday, as global energy and commodity costs and the lira’s steady decline continue to push prices higher.
Inflation has surged since last autumn, when the lira slumped after the central bank gradually cut its policy rate by 500 basis-points to 14% in an easing cycle sought by President Tayyip Erdogan.
It has been further stoked this year by the economic fallout from Russia’s invasion of Ukraine, as well as the lira’s continued decline. The currency shed 44% against the dollar last year, and is down 27% this year.
The median estimate 10 institutions who participated in the Reuters poll for annual inflation in July was 80.50%, with forecasts ranging between 79.45% and 82.50%.
That would make it the highest reading since August 1998, when annual inflation was 81.4% and Turkey was battling to end a decade of chronically high inflation.
The median forecast for the monthly figure was 2.90%, in a range of 2.28% and 4%.
Inflation was seen falling only to 70% by the end of the year, according to the median estimate of 11 economists, with forecasts between 60.75% and 77%.
The median for the year-end was 69.5% in the previous Reuters poll conducted in June.
The government has said inflation will fall with the new economic programme, which prioritises low rates to boost production and exports and aims to achieve a current account surplus.
Erdogan has said that he expects inflation to come down to “appropriate” levels by February-March next year, while the central bank raised its end-2022 forecast to 60.4% on Thursday from 42.8% previously.
The bank’s quarterly presentation showed the estimated range of annual inflation reaching nearly 90% this autumn before easing.
Opposition lawmakers and economists have questioned the reliability of the Turkish Statistical Institute’s (TUIK) figures, claims TUIK has dismissed. Polls show Turks believe inflation is far higher than official data.
TUIK is scheduled to announce July inflation data at 0700 GMT on Aug. 3.
Reporting by Ezgi Erkoyun; Writing by Ali Kucukgocmen; Editing by Daren Butler
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