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In Turkey, inflation, at its highest since 2003, overwhelms the population

Estimated at 69.97% over one year in April, inflation is fueling the discontent of a large part of the population in Turkey. At the collective taxi stop (dolmus) commuting between Nisantasi and Besiktas in the heart of Istanbul, two middle-aged women admit they are struggling to make ends meet. “The prices have gone crazy. The worst thing is that inflation is much stronger than what is announced in high places. The proof, a journey in dolmus cost 3.50 Turkish liras [environ 0,22 euro] a year ago, today is 7.75”, underlines in a low voice one of the two retirees.

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Inflation may have been in double digits since 2017, but the surge has never been so strong since Recep Tayyip Erdogan came to power in 2003. The loss of purchasing power is at the center of all conversations : those of students in need of accommodation because of the increase in rental prices (+ 70%), those of housewives who can no longer buy meat (+ 260%) and, finally, those of low-income households who are struggling to pay their gas (+60%) and electricity (+97%) bills.

Backwards

Timour, in his thirties, computer engineer, despairs of being able to find accommodation within reach of his scholarship. “However, I have a good salary of 11,500 tl [livres turques], but I can’t find an apartment for less than 8,500 tl per month in the city center, which leaves me very little to live on. So many years of study for that? If it continues, I will try my luck abroad,” confides the young Stambouliote.

In April alone, in the middle of Ramadan, prices rose by 7.25% over one month, undermining the popularity of the Islamic-conservative government a little more, about a year before the elections (presidential and legislative), scheduled for June 2023.

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President Erdogan, who aims to be reappointed after nineteen years at the head of the country, appears unable to keep his promises of economic prosperity. Inflation is its biggest failure. She should “slow down after May”, he assured recently. However, it is rather the opposite that is likely to occur. The war in Ukraine will inevitably cause prices to rise again, especially those of gas and oil, which Turkey imports.

“Everything is done in the most total opacity”, estimates Deniz Ünal, economist

The manufacturers “will not be able to fully absorb very high production costs, mainly due to energy prices, and will have to pass at least part of this burden on to their customers, resulting in higher consumer prices even longer”, pointed out in a note Piotr Matys, an analyst at In Touch Capital Markets Ltd, after the publication of the latest inflation figures.

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