Turkey's inflation hits new 24-year high beyond 80%

Turkey's inflation hits new 24-year high beyond 80%

Turkey's annual inflation climbed to a fresh 24-year high of 80.21% in August, a bit below expectations according to official data,after the central bank unexpectedly cut interest rates and stoked a cost-of-living crisis.

Despite expectations that inflation is not expected to fall in the next few months, the bank lowered its key rate by another 100 basis points last month to 13%, citing indications of an economic slowdown.

That was the highest reading since August 1998, when annual inflation was 81.4% and Turkey was battling to end a decade of chronically high inflation.

The highest annual inflation was seen in transportation, where prices rose 116.87% year-on-year, despite prices in the sector dropping 1.78% month-on-month. In the key food and non-alcoholic drinks' sector prices jumped 90.25%.

The data had little impact on the lira , which traded at 18.2250, unchanged from its early levels.

The domestic producer price index rose 2.41% month-on-month in August for an annual rise of 143.75%.

The government has said inflation will fall with its economic programme prioritising low rates to boost production and exports with the aim of achieving a current account surplus.

According to government forecasts released on Sunday, Turkey expects inflation to ease to 65% by end-year.