Roundup: Turkey’s inflation rate nears 20 pct, highest since 2019
ANKARA, Nov. 3– Turkey’s annual inflation rate accelerated to 19.89 percent in October, the highest figure in over two years, driven mainly by a rise in energy costs, Turkish Statistical Institute data showed on Wednesday. As an import-reliant country, Turkey raised the price of natural gas used by power plants and industry, the state energy company announced…
ANKARA, Nov. 3 (Xinhua) — Turkey’s annual inflation rate accelerated to 19.89 percent in October, the highest figure in over two years, driven mainly by a rise in energy costs, Turkish Statistical Institute (TurkStat) data showed on Wednesday.
Month-on-month, prices surged by 2.39 percent, nearly reaching the annual threshold of 20 percent for the first time since early 2019, it showed.
Persistent high inflation is an issue for the Turkish economy for decades. Overall inflation is being lifted by a rise in food and fuel prices, as well as the depreciation in the Turkish currency lira.
As an import-reliant country, Turkey raised the price of natural gas used by power plants and industry, the state energy company announced Monday, as a global price spike drove up import bills.
The country’s natural gas distributor BOTAS said the price of gas used by power plants was increased by 47 percent and the price of gas used by industry by over 48 percent.
As one of the largest gas importers in Europe, Turkey depends on pipeline gas from Russia, Azerbaijan and Iran as well as liquefied natural gas (LNG) imports from Nigeria, Algeria and spot markets.
The gas price hike follows a series of price increases on fuel and gasoline as households are struggling to make ends meet amid the COVID-19 pandemic, which has exacerbated economic vulnerabilities.
Meanwhile, a harsh winter may increase residential electricity and gas needs and thus consumption, adding to households’ woes.
The national currency has lost over 20 percent of its value since the start of the year amid a monetary easing policy that has brought Turkey’s benchmark policy rate to 16 percent from 19 percent in the past two months to boost credit and exports.
Last week, the Turkish central bank raised its year-end inflation forecast to 18.4 percent from 14.1 percent. The revision was mainly driven by higher import costs and food prices, the bank said.
“Price increases are substantial and it’s going to continue, pinching households pockets for a long time,” Turkish economist Fatih Ozatay said in an article, adding that “we are in a period in which the rise of inflation is expected to continue.”
Enver Erkan, chief economist at Istanbul’s Tera Securities, said that “the trend converging to 20 percent may continue and we are facing high inflation.”
“We think the high increase in natural gas will have a general spillover effect with its reflection on electricity costs and various goods,” he noted in a note to investors. Enditem