Analysts believe that Turkey may be on the verge of a new inflationary crisis due to earthquakes, which have become the most destructive for the country in the last hundred years. It is noted that over the past three months, inflation in Turkey has been declining: in February, the figure was 55.7% per annum. Last year 2022 was an anti-record year for the country since 1998: inflation was 85% per annum. However, today the situation may change under the influence of two factors. Firstly, inflation may accelerate after the statements of Turkish President Recep Erdogan about plans to quickly restore the areas affected by the cataclysm and allocate about 100 billion liras for these purposes (for compensation and emergency assistance to victims). The second factor is the reduction of the base interest rate by the Central Bank of Turkey from 9% to 8.5% per annum. The Turkish central bank made such a decision to revive the country's economy. To date, the main threat of inflation is the rise in food prices. This is due to the complication of the logistics of food supplies due to the earthquake. According to experts' forecasts, at least $70 billion will need to be invested to restore infrastructure and provide housing for the population. Recall that several large-scale earthquakes occurred on the territory of Turkey in early February one after the other. According to the authorities, more than 45 thousand people have died, and about 100 thousand more were injured.
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