Turkey’s annual inflation rate surged to its highest level since 2002 in December, official data showed Monday, after a currency crisis sparked by President Recep Tayyip Erdogan’s unconventional economic policies.
Consumer prices jumped to 36.1 percent last month from the same period in 2020, up from 21.3 percent in November, according to the Turkish statistics office.
The figure is the highest since October 2002 when inflation reached 33.45 percent, before the party of Erdogan came to power in November that year.
It is also more than seven times the official government target.
Consumer prices rose by 13.6 percent in December from their levels the preceding month, reflecting a steady deterioration in Turks’ purchasing power which has further hurt Erdogan’s dropping approval rating.
Erdogan’s enduring success has often been attributed to the development and prosperity his government enabled after a financial crisis in 2001.
His Islamic-rooted party rose to power the following year, and he has dominated Turkish politics for the past two decades as both prime minister and president.
But he faces an increasingly difficult path to re-election in polls due to be held by mid-2023.
The Turkish lira lost 44 percent of its value against the dollar last year, with the losses accelerating at the end of last year, when Erdogan orchestrated a series of sharp interest rate reductions.
Erdogan rails against high rates as the “mother and father of all evil”, going against economic orthodoxy to claim they cause high inflation instead of tamping it down.
The dollar soared to a historic high of nearly 18.4 liras by the time Erdogan announced new currency support measures last month.
The exchange rate has since slipped back down to around 13 liras to the dollar, although the Turkish currency lost a further two percent after the inflation reading was announced.
A dollar was worth 7.4 liras at the start of 2021.