ISTANBUL -- Annual inflation in Turkey hit 78.62% in June, the highest rate since 1998, according to official data released Monday.
The Turkish Statistical Institute, or TurkStat, released the monthly figures as Turkey is experiencing a deepening cost-of-living crisis. Consumer prices rose by 4.95% on a monthly basis, the institute reported.
While many countries are seeing rising consumer prices, critics blame Turkey’s problems on President Recep Tayyip Erdogan’s economic policies.
The Turkish leader insists that high borrowing costs cause inflation — a position that contradicts established economic thinking — and advocats lowering interest rates to boost growth and exports.
Turkey’s central bank had cut rates by 5 percentage points since September, to 14%, before pausing the cuts in January. The Turkish lira lost 44% of its value against the U.S. dollar last year.
Russia’s invasion of Ukraine, which led to a surge in gas, oil and grain prices, has compounded the situation in import-reliant Turkey.
The sharpest increases in annual prices were in the transportation sector, at 123.37%, followed by food and non-alcoholic drinks prices at 93.93%, according to official data.
TurkStat’s figures have been questioned by economists, who allege the agency is subject to political pressure. The dismissals and resignations of senior TurkStat officials in recent months have added to claims of government interference.
The Inflation Research Group, which is made up of independent economists, on Monday said Turkey's true level of annual inflation for June was 175.55%.