Turkey's inflation jumped 79% in July, a 24 year high

Turkish inflation rose to a fresh 24-year high of 79.6 percent in July, data showed on Wednesday as the lira’s continued weakness and global energy and commodity costs pushed prices higher, though the price rises came out below forecasts.

Inflation began to surge last autumn, when the Turkish Lira slumped after the central bank gradually cut its policy rate by 500 basis points to 14 percent in an easing cycle sought by President Recep Tayyip Erdogan.

Month-on-month, consumer prices rose 2.37 percent in July, the Turkish Statistical Institute (TUIK) said, below a Reuters news agency poll forecast of 2.9 percent. Annually, consumer price inflation was forecast to be 80.5 percent.

Jason Tuvey, senior emerging markets economist at Capital Economics, said annual inflation may be approaching a peak, with energy inflation falling sharply and food inflation appearing close to topping out.

“Even if inflation is close to a peak, it will remain close to its current very high rates for several more months,” Tuvey said in a note.

“Sharp and disorderly falls in the lira remain a key risk,” he said.

The biggest annual rise in consumer prices was in the transportation sector, up 119.11 percent, while food and non-alcoholic drinks prices climbed 94.65 percent.

Inflation this year has been fuelled further by the economic impact of Russia’s invasion of Ukraine, as well as the lira’s continued decline. The currency weakened 44 percent against the United States dollar last year, and is down another 27 percent this year.

The lira was trading flat after the data at 17.9560 against the dollar. It touched a record low of 18.4 in December.