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Türkiye’s inflation picks pace, denting consumer confidence

Despite the economic revamp, the inflation in Türkiye remained stubbornly high, and many consumers said their living standards continue to decline.

In December, inflation in Türkiye rose to 64.8 percent on an annual basis, an acceleration from 62 percent in November.

Inflation has been back on the rise since last summer. Market watchers and the government say this cycle should hit its peak by mid-2024, to 70 percent, before decelerating to around 40 percent at the end of the year.

The country’s central bank made a sharp pivot in June when it began hiking interest rates under a new economic team. The rates have since been lifted from 8.5 percent to 42.5 percent.

With a series of other recovery measures, there seems to be light ahead for the national economy, observers believe, but for the time being, ordinary citizens are continuing to feel the pinch of rising prices of most goods, especially food.
Foodstuff prices have soared by 72 percent in a year, according to the Turkish Statistical Institute, pushing consumers to purchase the bare minimum.

“In my whole life, I never witnessed such a high cost of living,” Fikret Ozlek, a 62-year-old former restaurant manager, told Xinhua in capital Ankara’s Cankaya district as he was returning home from grocery shopping.

“Since I don’t pay rent I can get by but I feel sad for the younger generations. They cannot get married or buy their own house,” he lamented.

To compensate for the skyrocketing inflation, Türkiye’s government has decided to raise the minimum wage by almost half to 17,002 liras (570 U.S. dollars) per month this year.

However, for some economists, this substantial hike will not help workers to make ends meet for long.

Economist Baki Demirel, a scholar at Yalova University, expressed concerns over the eroding purchasing power of the newly set minimum wage.

“Within four to five months, the recent increase will be nullified due to inflation,” he told Xinhua, highlighting the plight of workers.

He said that millions of minimum-wage earners will find themselves earning below the poverty line for the second half of 2024.

Turkish President Recep Tayyip Erdogan has promised that inflation will drop significantly in the summer and that consumers will see some reprieve.

Last week, he said in a public speech in Istanbul, Türkiye’s financial hub, that his government “will not allow its citizens to be crushed by inflation.”

Yet some people expressed less confidence in the economy. “Thus far, 2024 has made a bad start, price tags are changing daily in shops, therefore I am pessimistic,” Nur Kiler told Xinhua outside a shop near Ankara’s landmark Atakule Tower.

“Other than food we cannot afford anything such as going out or socializing,” this woman in her sixties said.

According to a survey conducted by MetroPOLL research company in December, 56.1 percent of respondents said their standards of living have worsened in the past six months due to economic woes, compared to 21.4 percent saying their living conditions improved and 22 percent saying there has been no change. ■

Famagusta Gazette