According to data from the Turkish statistics institute Tüik on Monday morning, prices in the country rose by 1.25 percent in September alone. Calculated over the year, the current rate of price increases is 19.58 percent. That is 0.33 percentage points more than a month ago. One thing is clear: prices in the country will continue to rise. An end to the inflation rate – as requested by the government in Ankara – is not in sight.
According to a survey, few in Turkey believe that the published inflation figures are correct. 94 percent of those surveyed think that the actual rate of price increases is even higher. Support for the government in Ankara is dwindling among the same respondents.
The Turkish President does not seem to want to admit that. After visiting a supermarket near his private home in Istanbul, Erdogan said in front of the cameras: “As you can see, there are many different products of good quality and the prices are pretty reasonable.”
Top jobs of the day
Find the best jobs now and
be notified by email.
But the fact is: prices are rising dramatically. For example, at the end of September gas prices were raised by 15 percent by resolution. The prices for gasoline and diesel rose recently by 0.29 lira or by an average of 3.5 percent. Istanbul taxi driver Mustafa Canbaz complains: “We have to pay more, but we are not allowed to ask for more money.”
Groceries have also risen sharply: the price for a pack of 36 eggs, as is often sold in Turkish supermarkets, has risen from 17 to 34 lira within a year. A five-liter pail of yogurt, one of the main ingredients in Turkish cuisine, has risen from 13 to 20 lira in the same period.
In order to demonstrate against the high rental prices, students have also taken to the streets in large cities in recent days. “We can no longer afford an apartment,” read several posters. In Istanbul, rental prices have risen by an average of 66 percent over the past twelve months.
Frustration at the high prices is also growing within the government. A government official quietly complained that he could hardly afford anything given the steep rise in prices. Holidays are no longer possible because the weak lira makes spending abroad even more expensive. A supporter of the ruling AKP party said that salaries were not keeping up with inflation.
Price comparisons on social media
For some time now, Turks have been spreading price comparisons on social media. They take the minimum wage as a yardstick and calculate what one can afford from it.
A pack of Turkish tea from the state-owned Caykur company currently costs 25.95 lira. The minimum wage is 2,825 lira. In Germany the same tea costs 4.99 euros. With an exemplary monthly minimum wage of 1,800 euros, you could afford 360 packs of tea in Germany, but only 108 packs in Turkey.
When buying a car, the dwindling purchasing power is even more evident. A Turkish minimum wage earner has to save 88 months for a new VW Polo, a German nine months.
The reasons for the price increase are varied. Current energy prices play a major role. Both oil and gas are becoming more and more expensive on world markets. At around US $ 80, a barrel of crude oil costs more than it has been since 2018. Iron and steel have also become more expensive, as has bitumen, the basic cement.
The weak currency also plays an important role. The Turkish lira recently fell again to a record low: One US dollar has cost around 8.89 lira for a week. At times the euro was worth 10.4 lira. And: The central bank, whose governors have had little to report for a long time, cut key interest rates in September, although inflation is rising.
In addition, the corona-related lockdowns of the past few months have led to a congestion in both consumption and investments. Many consumers who, out of uncertainty, did not make major purchases during the worst months of the pandemic are now making up for it. Fridges, cars, vacations – all of these are now in greater demand again. And when demand suddenly rises, prices rise too.
Companies such as the electrical appliance manufacturer Arcelik report record sales, some of which even exceed the revenues from the pre-Covid years. Hotels on the south coast of the country suffer from the still existing travel restrictions for foreigners who want to travel to Turkey. But you see more and more residents on Turkish beaches. Rich citizens in particular, who previously had enough money to travel to Europe or the USA, are now spending their money in the country.
Opposition takes advantage of the situation
Nevertheless, many research institutes recently raised the growth forecast for Turkey’s gross domestic product (GDP). The Institute of International Finance (IIF), for example, is now assuming GDP growth of eight to nine percent for 2021. So far, experts have expected growth of five to six percent.
Nevertheless, the columnist Erdal Saglam predicts a “black winter” for Turkey. If, for example, the US Federal Reserve gradually raises interest rates again, emerging countries like Turkey would feel the tightening of money flows more than other countries.
The opposition is making targeted use of the situation. Opposition leader Kemal Kilicdaroglu from the republican CHP promises to stop the price spikes if he is elected president and to support all social classes so that nobody has to suffer from the high prices.
How he intends to finance this is unclear. Nevertheless, his strategy gets caught. “People have to borrow money to buy tomatoes and peppers,” Kilicdaroglu wrote on Sunday evening in a tweet that was liked almost 18,000 times within two hours.
The only source of this predicament is the president. Kilicdaroglu speaks directly to Erdogan: “If we make history out of you on election night, you will see how prices fall.”
More: Turkish central bank surprises with rate cut