According to the latest official figures, prices in Turkey are rising at their highest rate in 24 years.
The annual inflation rate, the pace at which prices are rising, reached 78.62% in June, slightly above expectations.
Transportation costs and housing saw some of the sharpest price increases, exacerbated by the war in Ukraine.
Inflation has skyrocketed since last year, when Turkey’s president cut interest rates to stimulate the economy.
Normally, countries would raise interest rates to cool inflation. But President Recep Tayyip Erdogan has dubbed interest rates “the mother and father of all evils” and employed more unorthodox policies to try to dampen prices, including intervention in foreign exchange markets.
The interest rate cut last year from 19% to 14% has caused the Turkish lira to fall in value, making it more expensive for the country to import goods from abroad.
In the latest inflation numbers, transportation has seen the biggest increase in costs, up 123% over the past year.
Food and non-alcoholic beverages were close behind with price increases of 94%, while the cost of furniture and appliances increased by 81%.
The headline inflation figure was the highest since September 1998, when annual inflation hit 80.4% and Turkey struggled to end a decade of chronically high inflation.
The high inflation rates make it difficult for companies.
“I’ve never experienced a season like this,” said hotelier Volkan Yorulmaz, General Manager of Kemer Holiday Club in Antalya. “I can’t budget for my expenses because the costs change from day to day. The all-inclusive concept is no longer sustainable.
“More than 50% of our guests come from Russia or Ukraine, so the start of the season without them was a bit problematic.
“Turks try to go on vacation. They use credit cards, pay in installments or shorten their planned vacation to be able to afford it.”
Add Comment