Turkey’s annual inflation rate accelerated in October, reaching the highest level in almost 25 years, as the country’s central bank sticks with an unorthodox interest-rate easing cycle.
The consumer price index–which measures what consumers pay for goods and services–increased 85.5% in October on year, quickening from a 83.5% rise in September, according to data released Thursday by the national statistics office Turkstat. This marks the highest inflation rate since June 1998.
The reading broadly matches the 85.6% consensus from economists provided by FactSet.
The rise in the annual inflation rate was driven by higher prices for transportation and for food and non-alcoholic beverages, the data showed.
Facing a growth-inflation tradeoff ahead of the 2023 elections, President Recep Tayyip Erdogan has gambled on an ultra-loose monetary policy to boost investment and exports at the expense of runaway inflation and deteriorating macro imbalances.
Turkey’s central bank cut its key interest rate for a third consecutive month on Oct. 20. In its statement, the bank said it will end its rate-cutting cycle in November with a final 150 basis-point interest-rate cut to 9.50%.
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