Turkey Inflation Accelerates Again

The annual inflation rate in Turkey rose for the second month in a row and is now over 11%, well above the government’s 5-percent target. President Recep Tayyip Erdogan blames high interest rates, DW reported. Turkey’s annualized inflation rate rose to 11.2% in September, the state-run statistics agency Turkstat reported, with the costs of education and transportation seeing the biggest monthly gains. The overall increase was slightly below market expectations, but shows a return to higher costs, after a period earlier this year in which the inflation rate dipped into single digits. However, there was a significant increase in core inflation, which hit its highest levels since February 2004. “What is even more concerning is that the upward trend will likely extend to the upcoming months,” according to a note from QNB-Finansbank, which said inflation may hit 11.5% by the end of the year. Turkey has seen strong economic expansion this year, in part due to rising exports, fiscal stimulus and credit growth, which has also led to consumer-side demand increases, putting pressure on inflation.