Turkish bank blames 70 percent inflation on energy costs, supply issues

Turkey’s central bank said a worldwide spike in the price of energy and commodities, along with global supply disruptions, were largely to blame for an acceleration in annual inflation to 69.97 percent last month.

Consumer price increases were spread across sub-groups, but the most obvious contribution came from energy products, electricity, water, food and furniture, the central bank said on Thursday in its Monthly Price Developments report, which it publishes the day after monthly inflation data is announced.

Turkey has the sixth-highest inflation rate in the world after the central bank bucked a global trend of tightening monetary policy and cut interest rates late last year, acting on the orders of President Recep Tayyip Erdoğan. It lowered borrowing costs to 14 percent from 19 percent in the final four months of 2021 and has kept them unchanged since despite a surge in prices.

The price of fresh fruits and vegetables, which was almost flat in March, displayed a high increase in April, the central bank said.

Turkey’s government is also blaming the jump in inflation, which has reached a two-decade high, on global inflationary pressures. Erdoğan, who has sacked three central bank governors in three years, has opposed hikes to interest rates, saying higher rates cause inflation and that his Islamic beliefs prevent him from supporting such increases.

Some independent assessments of prices in Turkey estimate that annual changes are exceeding 100 percent. Inflation accelerated to 156.9 percent last month, the ENAGGroup, a research group set up by Turkish academics to calculate inflation, said on Thursday.

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