Inflation rises to over 25%

In October, inflation in Turkey exceeded 25%, its highest level since 2003. Why consumer prices rose – although the lira has recently recovered.

The crash of the Turkish national currency has further increased inflation in Turkey. As announced Monday the National Bureau of Statistics, consumer prices rose 25.24% in October over the previous year. The previous month, the rate of inflation was high at 24.52%. The price increase in October is the highest since mid-2003, more than 15 years. Analysts' expectations have been slightly exceeded.

Manufacturers' prices have risen again

Above all, the high inflation is a consequence of the sharp losses of the Turkish lira. This development increases the price of imports into Turkey, on which the country depends. Turkey has a chronic current account deficit.

Even more than consumer prices, the prices that manufacturers charge for their products have increased. They increased by 45% in October over the year. Producer prices are sometimes delayed in relation to consumer prices.

Lira has been able to recover lately

In recent weeks, the lira has rebounded sharply in major currencies such as the US dollar and the euro. The political easing with the United States after the release of an American pastor by Turkey is one of the main reasons. The case had generated significant tensions with the United States and resulted in US sanctions.