West News Wire: As President Recep Tayyip Erdogan has defended unconventional methods to tackle a cost-of-living issue, official data released on Thursday indicated that Turkey’s annual inflation rate increased to 85.51 percent in October, its highest level since 1997.
With Erdogan referring to increased interest rates as his “worst adversary,” Turkey defies the global trend of central banks raising borrowing costs in an effort to rein in soaring consumer prices.
The policy rate of Turkey’s central bank was lowered to 10.5 percent from 12 percent last month, marking the third straight reduction.
Erdogan challenges conventional economic ideas, saying that high interest rates, not the other way around, are what causes inflation when an election is approaching next year.
In September, consumer prices increased by 83.45 percent.
On Wednesday, Erdogan praised the state of economy, in an address to his ruling AKP lawmakers in the parliament.
“Thank God, the wheels of the economy are turning,” he said.
“Our economic model, which we have summarised as growth through investment, employment, production, export and current account surplus, is bearing fruit.”
Many Turks question the credibility of the official government data.
According to a respected monthly study released by independent economists from Turkey’s ENAG research institute, the annual rate of consumer price increases reached 185.34 percent in October.