In February, the rise in consumer prices had reached 54.4% year-on-year, accumulating records linked to the collapse of the Turkish lira and the surge in energy prices in particular.

The invasion of Ukraine by Russia, two important trading partners of Turkey on which its energy supplies (gas and oil) and cereals but also its tourist industry depend closely, is costing the country dearly.

Observers also question the policy of the Central Bank, which lowered its key rate for several months.

Turkish and foreign economists accuse the National Statistical Office (Tüik) of underestimating the extent of price increases by more than half.

The office reported on Monday an increase of more than 99% in the price of transport in one year, more than 70% in those of food products and 69% in capital goods.

The Turkish lira, which lost 44% of its value against the dollar in 2021, remained stable on Monday morning at 14.7 pounds to the dollar (16.2 to the euro), however, as the market had already anticipated rising inflation. .

A currency exchange office in Ankara, February 23, 2022 Adem ALTAN AFP / Archives

Turkey has experienced double-digit inflation almost continuously since early 2017 but had never seen such a rise in consumer prices since President Erdogan's Justice and Development Party (AKP) came to power at the end of 2002.

- central bank and interest rates-

Less than fifteen months before the next presidential election, scheduled for June 2023, the ongoing conflict since February 24 raised fears of further consumer price increases, adding to the already difficult situation of the Turkish economy.

President Recep Tayyip Erdogan, who is working to promote direct negotiations between the two Russian and Ukrainian presidents, last week announced a reduction in VAT from 18% to 8% on hygiene products and catering in order to relieve the finances of his fellow citizens.

In February, he had already lowered the VAT from 8 to 1% on basic food products, without however succeeding in curbing the price increases which partially erased the salary increases granted on January 1.

The Head of State on Saturday asked for "patience" from the Turks: recognizing that the war in Ukraine was already affecting consumer prices, he explained "waging a battle against those who impose exorbitant prices" and warned that he will be "ruthless" with speculators.

Photo provided on March 29, 2022 by the press service of the Turkish presidency of Recep Tayyip Erdogan, during negotiations between Russians and Ukrainians in Istanbul Murat CETIN MUHURDAR TURKISH PRESIDENTIAL PRESS SERVICE/AFP/Archives

"We have to overcome the problems. I ask the nation to be patient and trust us," he said.

But Timothy Ash, an analyst at BlueAsset Management in London and a recognized specialist in Turkey, attributes the responsibility for this surge in prices to the policy of the central bank, "major cause of inflation" according to him, for having lowered rates. from 19% to 14% between September and December - it has kept them stable since January.

This "unorthodox policy" has spurred inflation, he says, and "the war in Ukraine has just made things worse."

"Let's not forget that the target is inflation at 5%, which the Central Bank has not been able to achieve since 2011," he notes again.

However, warns Jason Tuvey of the London firm Capital economics, the inflation rate "may rise a little more in the coming months."

He too regrets that there is "still no sign from the central bank and, above all, from President Erdogan that they are ready to change course and raise interest rates".

Rating agency Standard & Poor's last week gave Turkey a negative long-term rating, from "B+" to "BB-".

© 2022 AFP