Investing.com – In a new Turkish move that will raise prices and raise the country’s inflation rates, which are at their highest levels in almost a quarter of a century, the Turkish government has decided to raise gas and electricity prices.
In conjunction with the new Turkish decision, it moved downwards, as it is still hovering near its lowest level ever, which it reached when inflation jumped to 36% levels last December.
The Turkish Energy Regulatory Authority (EPDK) said that it raised electricity prices for households by 20%, services by 30%, and those used in industry by 50%.
The Turkish authorities raised the prices of electricity and natural gas for households by about 20% and about 50% for industry on Thursday, September 1, which puts more upward pressure on inflation, which reached about 80% last July.
Higher utility prices are expected to push inflation up 0.8 percentage points, and higher industrial prices will also indirectly increase inflation as producers shift costs onto consumers.
Botas, an energy importer in Turkey, said it raised the price of household by 20.4%, by 47.6% for small industrial customers, and by 50.8% for large industrial users.
The Turkish company BOTAS decided to increase the price of gas used to produce electricity by 49.5%, according to the company’s statement.
Despite the recent increases, the Turkish company confirmed in the statement that the Turkish government still subsidizes more than 80% of the prices of natural gas for households.
Domestic natural gas prices have increased by 174% this year, and small and medium-sized industrial gas prices have increased by 277%, and large industrial gas prices have increased by 379%.
The lira is trading today, Thursday, near levels of 18.2413 pounds, down by 0.2%, while the highest price was recorded at 18.1845 pounds.
The Turkish lira fell during the trading month of last August by 2.3%, down from levels of 17.8 lira dollars to levels of 18.2 liras at the end of trading on Wednesday.
increase in poverty
The Turkish Federation of Trade Unions “Türk-İş” announced the data on poverty and hunger limits during the current month of August 2022, and the data came as follows:
The hunger limit for a family of 4 people, who wants to have a healthy and sufficient diet, is 6,889 Turkish liras, with a per capita share of approximately 1,722 liras, an increase of 25% from the minimum wage.
As for the poverty line for a family of four, it reached 22,442 Turkish liras, and the per capita share should be approximately 5610 liras, which means an increase of more than 308% from the minimum wage.
The Turkish Federation of Trade Unions “Türk-İş” announced that the monthly cost of living for one employee amounted to 8,999 Turkish liras, an increase of 64% over the minimum wage.
A recent survey by the Statistics Regulatory Authority in Turkey revealed that the participants expected the Turkish lira to reach a new record level this year, recording 19.65 lira to the dollar.
The Statistical Regulatory Authority of Turkey conducted a survey among financiers, on the basis of which it published a survey of market participants’ expectations.
The respondents expected that inflation in Turkey by the end of the year might reach 70.6% by the end of the year, while the Turkish Central Bank expects inflation to reach 60.4%.
The bank had kept the interest rate at 14% for the past seven months after cutting it by 500 basis points at the end of last year, in a series of cuts that led to a historic currency crisis and pushed inflation to its highest level in 24 years.
Last month, the bank raised its year-end inflation forecast to 60.4 percent, compared to an average of 70 percent by experts, and expects the annual consumer price index to peak near 90 percent this fall.
Inflation will jump
In a recent interview with Bloomberg, Steve Hanke, an academic at Johns Hopkins University, said Turkey’s annual inflation rate is by no means less than 132%.
“According to our calculations at Hopkins, the Turkish government’s claims that Turkey’s annual monetary inflation rate is 79.6% is far from the truth,” Hanke said.
Hanke predicted that Erdogan will continue to fuel inflation with his baseless war with interest rates, explaining that Turkey ranks third in this week’s global inflation report.
Official Turkish data showed that annual inflation accelerated to 79.6% last July, from 78.6% last June, and Istanbul witnessed price growth exceeding 99% in July compared to the previous year.