Turkiye's Annual Inflation Climbs to 61.53 Percent in September

Figures from the Turkish Statistic Institute showed the consumer price index (CPI) in September increased by 4.75 percent monthly.

The annual CPI experienced a consecutive decline from a peak of 85.51 percent in October 2022 to 38.21 percent in June 2023, and then headed up to 47.83 percent in July and recorded 58.94 percent in August.

The central bank embarked on a tightening cycle after President Recep Tayyip Erdogan appointed former bankers Hafize Gaye Erkan as central bank governor, and Mehmet Simsek as the head of the Treasury and Finance Ministry in June. Both bankers were considered market-friendly.

The central bank aggressively raised interest rates from 8.5 percent to 30 percent during the June-September period. However, despite these efforts, prices continued their ascent, defying public expectations.

The re-accelerating inflation is driven by the government's tax increase to address its budget deficit, hefty wage hikes, and rising exchange rates, among other factors.

In July, the central bank more than doubled its year-end inflation forecast to 58 percent, up sharply from 22.3 percent three months ago.

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