Surging inflation tightens circle around Turkish economy
Having hit 18% in August, Turkey’s inflation is expected to continue rising in the coming months, coupled with the prospect of stagnation.
Turkey’s soaring inflation, exacerbated by a fresh spike in August, is stoking apprehension over the country’s economic future and appears to strengthen the prospect of an intervention by the International Monetary Fund (IMF). The August figures, released Sept. 3, brought year-on-year inflation to 18% in consumer prices and 32% in producer prices. Barring Argentina, such rates are unseen among Turkey’s emerging-economy peers, in many of which inflation is not even in double digits.
The price hikes are unlikely to abate in the coming months, with consumer inflation expected to hit at least 20% at the year-end. The ballooning problem owes much to structural reasons, which highlights the need for sounder diagnoses and long-term remedies.
