Turks pay price for Erdogan’s financial policies 

As Turkey’s lira plummets food prices have doubled over the last year with more increases expected.

Turkey’s official inflation in June hit a 20-year-high of 74 per cent, according to the Turkish Statistical Institute, the government data agency, although analysts claim the actual rate is closer to 160 per cent. 

Inflation has wiped out many Turks’ savings and forced people to focus on feeding themselves and their families. 

Health-care inflation was recorded at 39.3 per cent, while the recreation and culture sector has seen 50.5 per cent inflation.

The transport sector recorded 123.4 per cent in June, according to the government agency.

The lira is worth about 20 per cent less against the US dollar than on January 1 with forecasters predicting further declines.

“Five years ago buying food wasn’t a luxury; now people who are poor and in precarious situations are not able to pay for food,” Hacer Foggo, a poverty analyst who is advising the opposition Republican People’s Party or CHP, told the Independent. “They are not able to pay for a normal apartment. They can’t pay for natural gas. They’re not able to buy meat or milk, they are getting around on single food packages of just pasta.”

Parents cannot afford baby formula and children are being taken out of school to work. 

Poorer women cannot afford tampons, making it more difficult for them to go to work or school. Free birth control is no longer available, increasing the risks of unwanted pregnancies. 

S&P Global Ratings’ regional report released this month said: “Acute exchange rate and inflationary pressures are hitting consumer purchasing power and undermining confidence, which will continue to weaken private consumption.”

Timothy Ash, an economist at Blue Bay, a London asset management company, blames the inflation surge on Turkey’s President Recep Tayyip Erdogan. 

The veteran populist has defied macroeconomic orthodoxy by keeping interest rates low to alleviate inflation. Keeping rates relatively low and credit available to boost growth is largely blamed by economists for causing chronic inflation.

“Inflation impacts on everyone and everyone can feel it,” Ash said. “It’s hard to feel the difference between 3 to 4 per cent growth and 6 per cent growth. But everyone feels inflation of 75 per cent.”

 

Turkish commodities are becoming increasingly expensive. Picture credit: Eurasia Times