Inflation in Turkey rose further in June to 78.6 percent. That is the highest level since January 1998. Last month the currency depreciation was 73.5 percent and at the beginning of last year at 15 percent.
Inflation last month was mainly driven by transport costs, which have soared by more than 123 percent. A price explosion for soft drinks (plus 94 percent) also makes shopping a lot more expensive. Rising energy prices also play a role.
Turkish Finance Minister Nureddin Nebati recently promised that consumer prices would fall from December. Inflation last month was slightly lower than what economists had generally expected.
Turkish inflation has been structurally in double digits for years. Authorities gave priority to economic growth and exports. Last month, the lira again weakened against the US dollar. The Turkish currency has long been the worst-performing currency of all emerging markets.
In the run-up to next year’s elections, Erdogan’s government has again raised minimum wages by some 30 percent. In January, Turkey also raised wages by a record 50.5 percent.