Turkey's inflation reaches two-decade high at 78.6%
2 Min Read
In June, Turkey's annual inflation rate jumped to 78.6 percent, the highest in 24 years.
Turkey's annual inflation rate jumped to 78.6 percent in June, the highest in 24 years, according to official figures released on Monday, as President Recep Tayyip Erdogan's unorthodox economic policies continue to take their toll.
The statistics released by Turkey's state agency are the highest since January 1998.
Turkey's official inflation rate was above 70% in April, according to figures released on Thursday, posing a significant challenge to President Recep Tayyip Erdogan's government.
Economy Minister Nureddin Nebati "promised" on Friday that consumer prices will begin to fall in December.
According to the report, headline inflation was driven by a 123.4 % increase in transportation costs and a 94% increase in non-alcoholic beverages.
The price of home products increased by 81.1%, according to the statistics office.
Turkey's economic crisis began last year when Erdogan compelled the central bank to implement a series of interest rate cuts.
Despite growing consumer prices, the policy rate was reduced.
However, Turkey's leader defies mainstream economics and believes that high-interest rates induce price increases.
Turkey hiked the minimum wage significantly for the second time in a year on Friday to cushion the shock to households.
The increase in net monthly take-home pay to 5,500 liras ($330) implies that the nominal minimum salary has nearly quadrupled since last year's conclusion.
In late December, it was 2,826 liras, and in January, it was 4,253 liras.
Economists warn that significantly enhancing the salary of a broad segment of the population would cause inflation and should be accompanied by interest rate rises or other measures of restricting expenditure.
According to official figures, more than 40% of Turks earned the minimum wage at the start of the year.
