Turkey Reports 36 Percent Inflation Rate, Food Prices Rise by 43 Percent Compared to 2020

The United States is not the only country in the world experiencing a major increase in inflation, as Turkey recently reported its yearly inflation.

The Turkish Statistical Institute reported on January 3, 2021, that the country's yearly inflation has risen to 36.08 percent in December. This growth was the fastest the yearly inflation rate in the country has risen in 19 years. The consumer price index also increased by 13.58 percent from November, while the yearly increase in food prices was recorded as 43.8 percent.

Such increases are prompting the country's banks to take action. One such bank is the Central Bank of the Republic of Turkey, which announced that its money distribution policy will change in an effort to ease inflation around the country.

"The monetary policy will be formulated to bring inflation to the target gradually," said the Central Bank to local news outlet Hurriyet Daily News. "In 2022, the bank will continue to implement the inflation targeting regime in a manner to create a foundation for sustainable price stability."

Rising inflation has resulted in the Turkish lira being worth less in value than ever before. Newsweek previously reported that the currency hit a record low on December 20, 2021, with 18.36 lira being equivalent to one U.S. dollar.

Turkey Market
A bystander walks past shops in Eminonu bazaar district of Istanbul, on December 21, 2021. Turkey's yearly food price increase has risen to 43.8 percent, according to findings published by the Turkish Statistical Institute. Photo by Ozan Kose/AFP via Getty Images

The weakened lira has made imports, fuel and everyday items more expensive and has left many in the country of some 84 million struggling to buy food and other basic goods. Many have been purchasing foreign currencies and gold to protect their savings.

Last month, Erdogan announced measures to safeguard lira deposits against volatility after the Turkish currency hit an all-time low of 18.36 against the dollar. The lira rebounded following the announcement but has since lost some of those gains. The lira depreciated by around 44 percent against the dollar last year.

Erdogan insists on lowering borrowing costs to boost growth, even though economists argue that higher interest rates is the way to tame soaring prices.

Also on Monday, Erdogan announced that Turkey's exports increased by 32.9 percent in 2021, to reach "a record" $225.4 billion.

Addressing a group of exporters in a televised speech, Erdogan said the figure amounted to a 7.8 percent narrowing of Turkey's trade deficit. Turkey would revise its export target for 2022 to $250 billion, he added.

Meanwhile, the independent Inflation Research Group, made up of academics and former government officials, put the yearly inflation rate at a much higher 83 percent. It said consumer prices rose by 19.35 percent in December compared with November.

The Associated Press contributed to this report.

Galata Bridge
Turkey's yearly inflation rate has risen to 36.08 percent, according to the Turkish Statistical Institute. Above, walkers cross the Galata bridge in Istanbul, on December 21, 2021, as Suleymaniye mosque is seen in the background at Eminonu. Photo by Ozan Kose/AFP via Getty Images