Turkey's high inflation rate has slowed down, according to government data. According to the Turkish Statistical Institute (TÜİK), the increase in consumer prices fell from 39.6 per cent in May to 38.2 per cent in June. This was the second consecutive month since the beginning of 2022 that the official inflation rate was below the 40 per cent mark. Last October, the inflation rate reached a 24-year record of 85.5 per cent, but it has been declining since then.

However, independent experts doubt the official inflation data. The regime-independent research group ENAG, based in Istanbul, estimates that inflation is more than twice as high. For May, it gave an inflation rate of 105.2 per cent, and in June it rose to 108.6 per cent. According to ENAG, its calculations are based on the same figures as those of the state statistics authority. These are derived from the trade in goods and services in Turkey.

Among the biggest price drivers are food and non-alcoholic beverages, which cost almost 54 per cent more than in June 2022. The Turkish central bank initiated a turnaround in monetary policy last month under its new head, Hafize Gaye Erkan, due to the sharp rise in prices. The key interest rate was raised from 8.5 to 15.0 per cent, while at the same time further increases were signalled.

The inflation target of five per cent remains a long way off. The inflation problems are also aggravated by the devaluation of the lira. Since the beginning of the year, the Turkish currency has lost more than 30 per cent of its value against the dollar. Turkey is a country poor in raw materials and has to import many goods that become more expensive due to the weak lira.