Turkey’s inflation accelerated in November, the first increase in inflation since August. Consumer prices rose 10.6% y-o-y, following an increase of 8.6% in the previous month. Last year, inflation peaked in October, reaching 25.2% amid the sharp depreciation of Turkish lira.
The increase was mainly driven by higher costs of alcohol and tobacco, along with increased prices consumers had to pay for education, health, hospitality, clothing and energy.
With the inflation higher than expected, Turkey’s central bank faced tough decision whether to cut interest rates further to boost economic growth. However, on December 12th, the central bank announced it would slash its key one-week repo rate from 14% to 12%. This is the fourth time the central bank has cut its benchmark interest rate this year, slashing it by 12%, from 24% in July.
