Sharjah24 – AFP: Turkey's annual inflation rate stabilised in July at just under 80 percent, official data showed on Wednesday, helping support President Recep Tayyip Erdogan's pledges that runaway prices would soon begin to fall.
The official annual rate of consumer price increases reached 79.6 percent in July compared to 78.6 percent in June.
Turkey plunged into a fresh economic crisis when Erdogan set off on an unusual economic experiment nearly a year ago that attempted to bring down chronically high consumer prices by slashing interest rates.
Conventional economic theory accepted by world governments states that lower interest rates drive growth and push up prices by building up demand.
Turkey now has a real interest rate of negative 64.4 percent. This means that people have a strong incentive to spend as much as they can before it loses even more value.
But Erdogan has repeatedly urged "patience" and vowed that prices would start falling again at the start of next year.
The central bank now forecasts the inflation rate to ease back down to roughly 40 percent by the time Erdogan is due to face a difficult re-election next July.
Opposition leaders and many Turks no longer trust official government data.
The annual inflation rate reported this week in Istanbul -- headed by a popular opposition party figure -- was almost 100 percent.
But a respected monthly study released by independent economists from Turkey's ENAG research institute also showed prices stabilising -- although at a much higher rate than the one reported by the state statistics agency.
Enag said the official annual rate of consumer price increases reached 176 percent in July compared to 174 percent in June.
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