The Turkish economy continues to experience inflationary pressure. In recent years, consumer price growth has spiraled out of control. Economists are reporting one record after another. The latest unprecedented surge was seen in August when inflation approached 60% on a yearly basis.
The Turkish Statistical Institute published a new portion of disastrous information. Thus, in August, consumer prices surged by 58.94% compared to the same period last year. Curiously, the Turkish central bank supposes that this figure is quite natural. The regulator hopes that in 2023, inflation will total 58%. In other words, the price growth of 60% is quite acceptable. According to the central bank, once inflation hits its peak in the second quarter of 2024, it will start to fall. However, not all analysts share such an opinion. For example, Erkin Isik, chief economist at QNB Finansbank, thinks that by the end of the year, inflation may climb to 70%. Then, in the middle of 2024, it will reach a peak of 75% because of the base effect of natural gas prices. What is more, Bloomberg Economics upgraded its inflation outlook for the end of the year to 65.5% from 57%.
In August, consumer prices manifested the sharpest increase since early 2022. The data was well above the forecast. Economists had anticipated a moderate rise to 55.9%. On a monthly basis, inflation reached 9.1%, also exceeding the forecast of 7%. Prices of food and alcohol-free drinks, which account for about ¼ of the market basket, soared by 72.9% on a yearly basis in August from 60.7% in July. Meanwhile, inflation in the services sector accelerated to 79.6% from 69.7% in the given period.
