Thursday 3 January 2019 11:01 am

Turkey's inflation rate eases to 20 per cent in December

Turkey’s inflation rate fell to 20.3 per cent last month following a slow down in the country’s economy.

The drop, which is the second fall in two consecutive months, was driven by a slump in price rises for clothing, footwear and transport according to the latest data from the Turkish Statistical Insititute. 

The inflation rate jumped above 25 per cent in October – the highest level in 15 years – during a crisis over the value of the country’s currency.

The lira lost around 40 per cent of its value last year during a row between President Tayyip Erdogan and US President Donald Trump over the imprisonment of an American pastor in Turkey.

Turkey’s central bank increased interest rates from 17.75 per cent to 24 per cent in September in a bid to slow inflation despite Erdogan’s opposition to interest rate hikes.

The central bank faced pressure from the president who called for lower interest rates ahead of the bank’s vote on the matter.

In October, finance minister Berat Albayrak announced plans to cut tax in sectors including automotives, white good and furniture.

Albayrak, who is the son-in-law of Erdogan, tweeted: “We are launching a series of VAT and STV reductions in the automotive, white goods, commercial vehicles, furniture and housing sectors."