Official data released by the Turkish government on Thursday has revealed that the country’s annual inflation rate in October rose to 85.51 percent, being its highest level since 1997, just as President Recep Tayyip Erdogan also defended unorthodox policies to combat a cost-of-living crisis.
Central banks worldwide are increasing borrowing costs in order to curb rising consumer prices, but Turkey has resisted the global trend, with Erdogan describing higher interest rates his “biggest enemy”.
The Turkish Central Bank cut its policy rate last month for a third consecutive time, bringing it down to 10.5 percent from 12 percent.
With an election imminent next year, Erdogan said high interest rates are the cause of inflation, not the opposite, in defiance of orthodox economic theories.
Meanwhile, consumer prices reached 83.45 percent in September and on Wednesday Erdogan applauded the state of economy, in an address to his ruling AKP lawmakers in the parliament.
“Thank God, the wheels of the economy are turning”.
“Our economic model, which we have summarised as growth through investment, employment, production, export and current account surplus, is bearing fruit.”
Many Turks have, however, criticised the credibility of the official government data.
According to a monthly study released by independent economists from Turkey’s ENAG research institute, the annual rate of consumer price reached 185.34 percent in October.
