Turkey’s annual inflation soared to its highest level in 19 years in December 2021, according to data from the Turkish Statistical Institute published on Monday.
The country’s annual inflation jumped to 36.08 percent year-on-year in December, the highest since September 2002, just months before President Tayyip Erdogan’s AK Party first took office, and far exceeding the annual inflation forecast of 30.6 percent.
Month-on-month, consumer prices rose 13.58 percent.
Basic staples such as transportation and food and drink saw the highest annual increases, with transportation increasing 53.66 percent, food and non-alcoholic beverages increasing 43.80 percent, and furnishings and household equipment up 40.95 percent.
The rising costs have left many Turkish citizens unable to afford basic goods and relying on government-issued food, such as bread, the price of which has risen considerably in supermarkets throughout the city in recent months.
Others are turning to NGOs for help paying their ever-increasing bills, with electricity prices set to increase 50 to 100 percent for households and companies this year.
According to unofficial data from the independent inflation research group ENAG, Turkey’s annual consumer price inflation rate was 82.8 percent in December, far higher than official claims. The group also said that consumer prices in Turkey increased by 19.35 percent month-on-month in December.
Elsewhere in Monday’s data from the Turkish Statistical Institute, the domestic producer price index, which measures the average changes in prices received by domestic producers for their goods and services, rose 19.08 percent month-on-month in December and increased by 79.89 percent on an annual basis, reflecting soaring import prices owing to a weakened Turkish currency.
The figures come amid ongoing investor concerns over Erdogan’s monetary policy, which has seen him repeatedly lower interest rates in the face of rising inflation.
Last month, the president announced it would pay the difference between the value of savings in lira and equivalent dollar deposits, should its decline against the currency exceed interest rates promised by banks, in an effort to safeguard deposits in the national currency against fluctuations.
While the move appeared to give the declining lira temporary respite, the currency has steadily begun to lose traction again in recent days. Overall, the lira has lost roughly half its value to the dollar this year.
As of 1:04 p.m. GMT on Monday, the Turkish lira was trading at 13.30 against the dollar.
Despite this, Erdogan said on Monday that the country’s trade deficit reduced 7.8 percent year-on-year to $45.9 billion, narrowed by a 32.9 percent surge in foreign sales.
Speaking at a news conference in Istanbul where he announced preliminary foreign trade figures for 2021, Erdogan said the surge in foreign sales has prompted an upward revision in export target for 2022.
“We are revising our 2022 [export] target as $250 billion,” the president said.
“Thanks to the strong performance in our exports, we had already exceeded the target of the medium-term program for 2021. In this program, we had determined nearly $231 billion in exports for the year ahead. I believe that we will exceed this figure as well. For that reason, we are revising our 2022 targets to $250 billion,” Erdogan noted.
The exports-to-imports coverage ratio climbed 5.8 points to 83.1 percent in 2021, the president stated. The largest rise was seen in exports to the United States, he said, while exports to the European Union rose by 33 percent to $93.1 billion.
“We are pleased to see that the increase in our exports has spread evenly throughout the world, rather than focusing only on certain regions,” said Erdogan.