Where people are relieved about 52 percent inflation

The inflation rate in Austria reached 2.5 percent in August, a figure above the Eurozone average. Elsewhere, price increases of 52 percent are the lowest in a year. But where?

An inflation rate of 52 percent – ​​that would probably be more than enough to make Austria burn. Not so on the Bosporus. People there are downright relieved.

In August, the inflation rate in Turkey fell to 52 percent, the lowest level in more than a year. In July, the inflation rate was 62 percent.

From July to August, the price of goods and services rose by almost 2.5 percent. Education spending remained the main driver of price increases, rising by 121 percent. Housing costs rose by 101 percent. Food and non-alcoholic beverages cost 45 percent more than a year earlier.

The central bank has raised its key interest rate to 50 percent in order to curb inflation. The higher financing costs are dampening demand, which in turn is limiting price increases. Given the slowdown in inflation, many economists expect that the central bank could lower its interest rates in November or December.

New central manager

In the past, the central bank had tried to stimulate the economy with cheap money at Erdogan's behest. The rating agency Moody's has upgraded Turkey's credit rating by two notches from “B3” to “B1”. The country has seen improvements in governance and has a tighter monetary policy, it said.

Since February of this year, Turkey has had a new central bank chief, Fatih Karahan. He is the successor to the resigned central bank chief Hafize Gaye Erkan. She had aggressively raised interest rates to curb inflation. She had given up the post because she had come under fire for allegations of cronyism. In December 2023, reports caused a stir that Erkan had to move in with her parents due to the high rents in Turkey. (ag./rot)