Turkey reported 61.14 percent inflation in March on an annual basis, Turkish television CNN-Turk reported.
The Associated Press notes that this is the highest annual inflation rate in 20 years.
According to the Turkish Statistical Institute (Turkstat), inflation rose 5.46 percent in March from the previous month.
According to Turkstat, annual inflation in Turkey reached 54.4 percent in February, the highest level since 2002.
In March, the biggest increase was in the transport sector – 99.12 percent and the increase in food prices was 70.33 percent, informs BTA.
The rise is due to an economic crisis exacerbated by the KOVID-19 pandemic. Meanwhile, Russia’s invasion of Ukraine has led to a sharp rise in gas, oil, and grain prices.
Turkey’s galloping inflation comes after several consecutive cuts in interest rates late last year, in line with President Recep Tayyip Erdogan’s policy of boosting growth, investment, and exports by keeping borrowing costs low. Contrary to classical economic theories, Erdogan insists that high-interest rates are the cause of inflation.
Between September and December, the central bank cut interest rates by 5 percentage points, but this year they remained unchanged at 14 percent.
The pound, which lost 44 percent of its value against the US dollar last year, fell in December to a record high of 18.41 pounds per dollar. The value of the national currency has fueled inflation in Turkey’s import-dependent economy, the AP notes.
In an effort to mitigate the blow to households, the government has introduced tax cuts on basic goods and partially subsidized electricity tariffs.
Inflation in the euro area reached a new record high
Inflation in the euro area accelerated to a record 7.5% in March 2021 compared to the same month a year earlier, according to preliminary data from the European statistical office Eurostat.
This is the highest level of inflation in the 19-nation monetary union since these statistics began to be kept in January 1997. This result is more than three times higher than the inflation target of 2% set by the European Central Bank.
By comparison, annual inflation in the euro area was 5.9% in February, with analysts forecasting an increase to 6.6% in March.
The largest contribution to the growth of consumer prices in March was once again made by energy prices, which increased by 44.7% compared to the same month last year. An increase of 32% was registered in February.
The prices of food, alcohol, and tobacco products increased by 5% on an annual basis, compared to 4.2% in the previous month. Non-energy industrial goods grew by 3.4%, following an increase of 3.1% in February. For services, the increase in prices on an annual basis in March was 2.7% compared to 2.5% in February.
