Official consumer price index (CPI) inflation in Turkey amounted to 83% y/y in September, following on from the 80% announced for August, the Turkish Statistical Institute (TUIK, or TurkStat) said on October 3 (chart).
The September figure is the highest headline inflation rate recorded by Turkey since the 85% posted in July 1998.
At 83%, Turkey stays in sixth place in the world inflation league. Turkey has led the global inflationary period. Now, it is to lead the stagflation/slumpflation period. Critics of the Erdogan administration claim the official growth figures in no way properly reflect the ongoing tragedy besetting the country’s real economy.
The Istanbul-based ENAG inflation research group calculated that in reality September inflation was 186% y/y.
The September figure was the highest posted since the 157% y/y reported for January 1995.
On July 28, the central bank increased its end-2022 annual inflation forecast to 60% from the 43% it predicted three months ago.
On September 28, Turkey’s president, Recep Tayyip Erdogan, said during a televised interview that he is intent on Turkey’s policy rate standing in the single digits by end-2022.
The MPC has three more meetings scheduled for the remainder of 2022. They are to take place on October 20, November 24 and December 22.
According to Erdogan’s guidance, the committee can be expected to deliver 100bp cuts at each meeting.
There is enough lira and there are perfectly suitable global conditions for another major-scale lira crash. It is not possible to estimate the exact timing of any crash ahead. The government would burn through whatever it can in the FX market before letting the currency plunge into the abyss.
November is a real candidate for some very serious shake-ups on the financial markets.