ANKARA, Turkey — Inflation in Turkey showed a sharp drop in December thanks mainly to a favorable base effect—a development that could help President Recep Tayyip Erdogan’s standing before an election, but is unlikely to bring relief to households suffering from a cost of living crisis.
Consumer prices for the year rose by 64.27% in December, the Turkish Statistical Institute announced on Tuesday, down from 84.39% reported in November.
It’s the second month in a row that inflation has eased after hitting a 24-year high of 85.5% in October. The fall is attributed to a base effect, with a high index from a year ago statistically bringing the inflation rate down.
While the pandemic and Russia’s invasion of Ukraine have stoked inflation around the world, experts say higher prices in Turkey were fueled by Erdogan’s belief that high borrowing costs lead to higher prices. Traditional economic thinking says that raising rates helps bring inflation under control.
Last year, Turkey’s central bank slashed interest rates by 5 percentage points, down to 9% despite high inflation. In contrast, central banks around the world raised rates to fight soaring inflation.
Erdogan, who faces an election in June, had promised a drop in the inflation rate in the new year and is likely to tout the fall in consumer prices during his electoral campaign.
In steps geared toward the election, the Turkish president has raised the minimum wage by 55% to ease economic hardships and also announced a measure that would allow more than 2 million people to retire early despite warnings of the move’s additional budgetary burden.
According to official data, consumer prices rose 1.2% in December on a monthly basis, compared to 2.9% in November. The sharpest increases in annual prices were in the housing sector, at nearly 80%, followed by food and nonalcoholic drinks prices at 78%.
Meanwhile, some economists have questioned the state institutes’ figures. The Inflation Research Group—made up of independent academics and experts—said Tuesday that Turkey’s true inflation rate for December is 135.55%.
More Must-Reads From TIME