Istanbul: Turkey has reported over 78.62 percent of annual inflation in official data released on Monday. With this, the country's inflation rate marks the highest recorded since 1998.
The consumer price that rose by 4.95 percent has now contributed to the cost-of-living crisis in Turkey, reported the Turkish Statistical Institute (TurkStat).
Russian invasion that led to a hike in gas, oil, and grain prices has contributed to the current situation in Turkey. At the same time, critics are blaming the economic policies of President Recep Tayyip Erdogan for inducing the crisis.
Erdogan's policy that contradicted established economic thinking blamed high borrowing costs as the major reason for inflation and insisted on lowering interest rates to boost growth and exports.
Russia's invasion of Ukraine, which led to a surge in gas, oil, and grain prices, has worsened the situation in import-reliant Turkey.
Turkey's central bank had cut rates by 5 percentage points since September, to 14%, before pausing the cuts in January. Last year, the Turkish lira lost 44 percent of its value against the US dollar.
Official data reported that 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%.
However, economists who challenge TurkStat's figures claim that TurkStat is subjected to political pressure, pointing out the controversies related to the resignation of senior TurkStat officials in recent months. Turkey's true level of inflation for June was 175.55 percent, the Inflation Research Group reported.