Türkiye's annual inflation climbed in July to 47.83%, up sharply from 38.2%, official data showed on Thursday, a week after the central bank more than doubled its year-end forecast.

The new figure, in line with expectations, comes as Türkiye radically shifts its policies since the May election that includes an end to more than a two-year era of ultra-low interest rates.

Last week, the central bank revised its year-end inflation forecast to 58% from 22.3%.

The rate had been steadily dropping since reaching a more than two-decade high of 85% in October last year. The central bank and economists have forecast an upward trend from July.

The consumer prices skyrocketed by almost 9.5% on a month-on-month basis, according to the Turkish Statistical Institute (TurkStat).

At her debut press conference last week, new central bank governor Hafize Gaye Erkan said inflation would increase "temporarily" due to the rising exchange rate of the lira as well as fiscal measures.

Under the former Goldman Sachs and First Republic Bank executive, the central bank twice hiked its interest rates from 8.5% to 17.5% even though that was not found ambitious enough by markets.

'New policy'

"It's clear that interest rate hikes are just one part of the new policy shift under way in Türkiye at the moment and that monetary tightening further ahead will be gradual," Liam Peach, senior emerging markets economist at London-based Capital Economics, said in a policy note.

"We think a rise in the policy rate to 27.50% or so by year-end is needed to sustain investor confidence," he suggested.

Economists welcomed President Recep Tayyip Erdoğan's turn to more traditional economics even though he still believes that high interests rates contribute to – rather than cure – growing consumer prices.

Erdoğan said after being re-elected he would allow his team economic team that includes Erkan and market-friendly Mehmet Şimşek as finance minister to take steps to fix the country's troubles.

"The new team are impressive and can design a route out of crisis," BlueBay Asset Management economist Timothy Ash said.

"We are seeing policy adjustment," he said, adding that would eventually help the inflation.

The lira was being traded 26.9 against the dollar on Thursday morning. It lost around 30% of its value since late May.