Turkey is one of the many European nations that’s seen the blunt end of the Russia-Ukraine conflict.
In April the nation’s inflation rate hit almost 70% as import prices from Russia and Ukraine began to skyrocket. Gas, oil, and grain prices have all been negatively affected, leading to inflation issues across Turkey. The effects of the war are further echoed by Turkey’s strong dependence on imports from the region.
While most economists believe a higher interest rate leads to lower inflation, Erdogan has stated the opposite. He has opposed raising borrowing costs to combat inflation in the past. Unlike the US and the UK’s economic policies, Turkey has cut its interest rate down to 14%.
The Turkish Statistical Institute has reported that food and drink prices have shot up 89% across the country, while transport prices have gone up 106%. As a result the Erdogan government has had to cut tax prices on what are considered “essential goods.”
Erdogan is hopeful for the nation however, as he reportedly expects the prices to go down across May.
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