After notching a staggering 79.6% annual inflation in July, Turkish authorities raised electricity and natural gas prices by around 50% for industrial consumers on Thursday.
Turkey’s energy regulator Enerji Piyasası Düzenleme Kurumu also hiked the electricity prices by 30% for public and services sectors, and by 20% for household consumers.
Meanwhile, state-owned energy firm BOTAŞ Petroleum Pipeline Corporation said it raised natural gas price for small- to medium-scale industrial customers by 47.6% and for domestic use by 20.4%. The firm added that gas prices used for electricity production also increased by 49.5%.
The huge increases in utility prices are anticipated to push inflation upwards by 0.8%, according to Reuters, which would potentially make annual inflation breach 80% in August. The industrial price hikes are also expected to drive up production costs for domestic goods, potentially spurring inflation further.
Despite the two-decade high inflation recorded last month, the Monetary Policy Committee of the Turkish central bank lowered its benchmark interest rate from 14% to 13% in a shocking reverse economic strategy.
Following the news, Turkish lira fell further, ranging at ₺18.20 as of this writing.
Earlier in February 2022 when annual inflation just broke 50%, protests broke out across Turkey demanding government action on soaring electricity prices. Some of the demonstrations were met with police using tear gas to disperse the crowd.
Information for this briefing was found via Reuters and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.