Inflation in Turkey rises to nearly 80%, hitting consumers

A man changes Turkish lira for USD and Euro at a currency exchange shop, in Ankara, Turkey, Tuesday, Nov. 23, 2021. Annual inflation in Turkey soared to nearly 80% in July. The Turkish Statistical Institute said Wednesday Aug. 3, 2022 that consumer prices rose by 79.6% from a year earlier, up about 1 percentage point from June data. (AP Photo/Burhan Ozbilici, File)

ISTANBUL (AP) — Annual inflation in Turkey soared to nearly 80% in July, official data showed Wednesday, with skyrocketing food, housing and energy prices hitting consumers hard.

The Turkish Statistical Institute said consumer prices rose by 79.6% from a year earlier, up about 1 percentage point from June data.

Independent experts say inflation is much higher than official statistics. Economists also say the huge rise in inflation is caused by President Recep Tayyip Erdogan's unorthodox belief that high borrowing costs lead to inflation despite established economic theory.

Turkey’s central bank slashed interest rates by 5 percentage points since September to 14%, sinking the national currency. While the bank has not made further cuts this year, central banks across the world are moving the opposite way, raising interest rates to combat global inflation.

In comparison, annual inflation hit a record 8.9% in the 19 countries that use the euro in July and a four-decade-high of 9.1% in the United States in June.

The Turkish lira lost 44% of its value against the U.S. dollar last year, eroding people's ability to buy even basic items. The dollar was trading at 17.95 against the lira Wednesday, with the lira's value some 25% lower than at the beginning of the year.