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Turkey’s inflation jumps to 69.9%

TURKEY’S annual inflation jumped to a two-decade high of 69.97% in April, according to data on Thursday, fuelled by the Russia-Ukraine conflict and rising energy and commodity prices after last year’s lira crash.

The surge in prices has badly strained households just over a year before presidential and parliamentary elections that could bring the curtain down on President Tayyip Erdogan’s long rule.

Erdogan first came to power as prime minister in 2003 before switching the country to a presidential system, and the unorthodox interest rate cuts made last year under p r e s s u r e from him have been blamed for lighting a fire under inflation. Monthon-month, consumer prices rose 7.25%, the Turkish Statistical Institute said.

“It’s about food and energy price increases but also the spectacular failure of monetary policy in Turkey - and it’s about the abject and total failure of Erdogan’s unorthodox monetary policy,” said strategist Timothy Ash at Bluebay Asset Management.

T h e surge in consumer prices was driven by a 105.9% leap in the transportation sector, which includes energy prices, and an 89.1% jump in food and non-alcoholic drinks prices, the data showed. Month-on-month, food and non-alcoholic drink prices rose the most at 13.38% and house prices rose 7.43%.

The lira dipped 0.9% to 14.8525 against the dollar after the release of the data. Presidential and parliamentary elections are due by June 2023 and opinion polls show Erdogan’s support declining.

“The really remarkable thing here is that opinion polls still suggest that the next election is still in the balance. Perhaps that says as much about the opposition as Erdogan,” Ash said. REUTERS