On Monday, the Turkish Statistical Institute (TurkStat) published data showing that annual consumer price inflation reached 80.21 percent in August.
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By the end of 2022, however, the Turkish authorities expect average inflation to reach 65 percent, according to a macroeconomic program published on Sunday. This three-year medium term program expects inflation will fall to 24.9 percent in 2023, 13.8 percent in 2024, and 9.9 percent in 2025.
The latest inflation forecast indicated a big increase from the 9.8 percent seen in the same report one year ago, although it was only slightly higher than the Central Bank's prediction in July that Türkiye's year-end inflation would be 60.4 percent. The program estimates Türkiye's economy to grow by 5 percent in 2023 and 5.5 percent in 2024.
Türkiye's unemployment rates are expected to be 10.8 percent in 2022, 10.4 percent in 2023, 9.9 percent in 2024 and 9.6 percent in 2025, it notes, adding the country's foreign trade deficit is expected to reach US$105 billion in 2022 and US$80 billion in 2023.
The program predicts that an increase in production and productivity would limit price increases, among which the food prices would be reduced to single digits in three years, while the Turkish lira would become stable.
Türkiye's economy grew by 7.6 percent year on year in the second quarter. Its annual inflation hit 79.6 percent in July, the highest level in 24 years.
This country is facing financial woes unseen in decades, with the Turkish lira keeping plunging since the outbreak of the COVID-19 pandemic in early 2020. The Russia-Ukraine conflict that started in late February worsened Türkiye's situation by pushing energy prices to new highs.
Despite high inflation, Türkiye did not raise interest rates as many monetary authorities did to counter inflation. Last month, the Central Bank shocked markets again with a 100-basis point cut of the interest rate to 13 percent.