ALBAWABA – Annual inflation in Turkey rose slightly in November, as household energy consumption exceeded natural gas support by the state, after having declined marginally in October.
Official data showed consumer prices up to the highest level in 2023, according to Bloomberg, with the annual rate up to 61.98 percent, the Turkish Statistical Institute reported Monday.
Inflation in Turkey declined slightly in October to 61.36 percent, which indicated that the rate at which consumer prices were rising was starting to ease. Especially after six months of successive interest rate hikes drove borrowing prices to 40 percent, up from 8.5 percent, according to Reuters.
Notably, the annual rate of inflation in Turkey for November was slightly lower than forecast, with the median estimate being 62.6 percent, according to a Bloomberg survey of economists.
On a monthly basis, inflation in Turkey stood at 3.28 percent in November.
Colder weather has pushed household gas use beyond the volume promised by President Recep Tayyip Erdogan before the May elections.
Erdogan’s gas giveaway covers up to 25 cubic meters per month – about half of the average household consumption at this time of year, according to Bloomberg.
Investors and analysts blame Erdogan's policies for setting off runaway inflation in Turkey, having forced the central bank to introduce radically lower interest rates, kicking off an inflation spiral that peaked in October 2022 - Shutterstock
Meanwhile, the latest batch of data showed higher borrowing costs starting to slow down consumption – a key goal of the central bank, as reported by Reuters.
On the other hand, Turkey's gross domestic product rose by just 0.3 percent between July and September, compared with 3.3 percent in the duration April through June.
Signs of Turkey's economy starting to emerge from crisis are starting to be noticed by foreign investors, Agence France-Presse (AFP) reported. Many had pulled out of the Turkish market, blaming Erdogan's unpredictable policies.
More so, the current rates remains significantly lower than in 2022. The official annual rate of inflation in Turkey peaked at 85.51 percent in October 2022, according to AFP.
Standard and Poor's revised Turkey's long-term sovereign credit rating to positive from stable last month, which adds to the optimism that Turkey’s current strife may be over soon.
Additionally, AFP’s analysts are pencilling in a final rate hike of 2.5 percentage points at the central bank's next policy meeting on December 21.
The central bank of Turkey, as reported by AFP, expects that it will take approximately two years
