Turkey’s annual inflation rate rose for a sixth straight month in November to a three-year high as the weaker pound and higher inflation expectations pushed up prices.
The consumer price index rose to 21.31% in November compared to the same period in 2020, the Turkish statistical service Turkstat announced on Friday.
Hotels, cafes and restaurants grew the most on an annual basis, followed by food and non-alcoholic beverages, according to Turkstat.
Consumer prices rose 3.51% month-on-month in November, according to Turkstat.
The producer price index increased by 9.99% compared to the previous month, recording an annual increase of 54.62%.
This suggests that the devaluation of the currency fuels import prices and will pass to headline inflation in the coming months, when economists see inflation approaching 30%.
Faced with pressure from President Recep Tayyip Erdogan, the Turkish Central Bank cut its benchmark interest rate for the third time in three months in November, despite double-digit rising inflation well above the 5% average. The president remains committed to the unconventional view that higher interest rates are causing, rather than curbing, price increases.
The prospect of further cuts in interest rates sparked a serious sell-off of the pound, which lost about 45% of its value this year, boosting the cost of key imports and fueling inflation.
Petros Kranias
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Source From: Capital
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