Above 78%. Turkey breaks 24-year annual inflation record in June

In Turkey, annual inflation, accelerating for 13 consecutive months, was 78.6% in June. This is the highest figure in the last 24 years. The cost of energy carriers grew by 151.3%, products – by almost 94%, says in the Turkish Statistical Institute consumer price report in June 2022.

According to the International Monetary Fund (IMF), by the end of 2022, Turkey will be in fourth place in the world anti-rating of countries with the highest inflation, after Venezuela, Sudan and Zimbabwe.

“Assuming there is no significant depreciation for the remainder of the year [турецкой национальной] currency, annual inflation could peak in October at around 88% yoy and end the year at 67%,” Barclays Plc economist Erkan Erguzel said in a report, excerpted from Bloomberg.

“We expect inflation to pick up further in the third quarter on the back of high energy prices, a weaker currency and the central bank’s reluctance to raise interest rates to stem price increases,” Turkish economist Selva Bahar Baziqi predicted.

Turkish President Recep Tayyip Erdogan has also acknowledged the problem. On the eve of the elections to be held in June 2023, he instructed the government to temporarily raise the minimum wage (minimum wage) in the country by 30% at once – despite the fact that the previous increase was a record (50.5%) and took place no later than January 2022.

According to official figures, more than 40% of all working Turkish citizens receive the minimum wage. Erdogan called on his compatriots to be patient and promised that by the spring of 2023 inflation would slow down to “reasonable” levels. However, economists at Deutsche Bank AG warn that this measure could backfire: Turkey is experiencing a typical “inflationary spiral” where wages drive up prices, which in turn creates the need for higher wages, and so on.

The weakening of the lira was one of the factors that influenced the increase in the price of tours to Turkey for Russians: over the past year, they, as RTVI reported, have risen in price by one and a half times. Local hoteliers have raised prices for accommodation, thus trying to compensate for the depreciation of the national currency. In some resorts, the increase in prices for hotel accommodation has exceeded 50% (for example, in Fethiye, rooms have risen in price by an average of 65%).