The annual inflation in Turkey has reached a 20 year high of 48.7% in January. The inflation spike was fueled by President Recep Tayyip Erdogan’s want for interest rate cuts last year and a resulting crash in the currency. Consumer prices jumped 11.1%, and both the consumer price inflation and annual inflation were higher than expected. The projected measures were 9.8% monthly and 46.7% annually.
The Iira lost 44% of its value last year after the central bank slashed interest rates by 500 points. The government also raised a series of prices this year that include bus fares, road tolls, electricity and gas along with the monthly minimum wage which was raised 50%. Food prices jumped 55.6% and transport related prices jumped 68.9%. The Finance Minister Nureddin Nebati predicted inflation will peak in April and remain under 50%.
Read more: Turkey’s inflation soars to two-decade high of almost 49%
So What: Historically this high of inflation can be an indicator of a coming period of significant social unrest.
What’s Next: Turkey has already been in a period of extended crisis. Expect more turmoil in the very near term.
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