Inflation in Turkey spikes to almost 70%

Inflation in Turkey reached record levels of almost 70% in April, rising by 8.83 points in a month, according to official statistics released today.

In particular, it rose to 69.97% year-on-year, from 61.14 in March, posing a huge challenge to the government of President Recep Tayyip Erdogan.

Economic analysts say many of Turkey's social's problems are due to Erdogan's unconventional economic strategy, which has alienated many foreign investors from the once-promising emerging market.

Erdogan insists on the unorthodox reduction of interest rates in order to "brake" the rise in consumer prices. The inconspicuous inflation rate is also attributed to the collapse of the pound which has made energy imports much more expensive.

Last year's currency slide was triggered by a 500 basis point-easing cycle which began last September under pressure from Erdogan, prompting the sustained surge in consumer prices that was stoked by fallout from Russia's invasion of Ukraine.

The surge in consumer prices was driven by a 105.9% leap in the transportation sector, which includes energy prices, and an 89.1% jump in food and non-alcoholic drinks prices, the data showed.

Month-on-month, food and non-alcoholic drink prices rose the most at 13.38% and house prices rose 7.43%.

The lira dipped 0.9% to 14.8525 against the dollar after the release of the data.

Inflation has continued to rise despite tax cuts on basic goods and government subsidies for some electricity bills to ease the burden on household budgets.

Presidential and parliamentary elections will be held in June 2023 and opinion polls show Erdogan's support declining.

[With information from Reuters]