Inflation peaks months earlier in Turkey than expected

19 Jan '22

1 min read

Pic: Shutterstock

Turkey’s finance minister Nureddin Nebati has reportedly said inflation would peak in January and hit single digits by June 2023 elections. A survey, however, showed inflation would be 30 per cent by 2022 end. The lira weakened by 44 per cent last year, and a currency crisis ended in December after government interventions and a scheme to protect lira deposits from forex depreciation.

Inflation surged to a 19-year high of 36 per cent in December last year driven by the lira plunge, the highest under President Tayyip Erdogan’s rule, and is seen reaching up to 50 per cent in the next few months. Nebati said it would, however, ease with approaching summer.

The minister told a global newswire that the lira facility had attracted 126 billion lira ($9.3 billion), of which 15 per cent came from foreign currency accounts, with some 300,000 people participating in the scheme.

Work on increasing the capital of state banks will be completed before the end of January, he said.

The lira crisis in November and December was sparked by the central bank’s 500 basis points of rate cuts to 14 per cent since September.

ALCHEMPro News Desk (DS)

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