In Turkey, butter and toothpaste become a luxury
Published: Thursday, Jan 11th 2024, 07:50
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Anyone in Turkey who complains about inflation in Switzerland only gets a weary smile. Inflation was just under 65 percent in December. Even the head of the central bank can apparently no longer find an affordable apartment in Istanbul.
When market vendor Sabri Yavuz sets off in the morning to sell white cabbage and lemons, he already knows that he will go home with too little money in the evening. "We can't make ends meet," says the 45-year-old.
On the table in front of him are piles of thick cabbages that he sells at an Istanbul market. People didn't buy anything, many complained about the prices, says the family man, who often doesn't know what to do next.
The inflation rate in Turkey was recently a whopping 64.77% year-on-year and is likely to rise further in the coming months. This is driving people in the middle and lower classes in particular into existential crises.
The reason for the high inflation is the economic policy that Turkish President Recep Tayyip Erdogan has pushed in the past. Low interest rates at all costs. Inflation skyrocketed and reached more than 85 percent in October 2021.
It was only after the elections in May 2023 and a change at the top of the central bank and the Ministry of Economy that Erdogan initiated a change of course. The key interest rate was raised significantly and currently stands at 42.40 percent. However, the fight against inflation will take a long time.
Butter and toothpaste alarmed
The fact that things have become much tighter for many people financially is also evident in supermarkets, where butter, toothpaste, olive oil and baby food, for example, are sometimes only placed on the shelves with an alarm. Last year, communication designer Mahir Akkoyun created a sticker to express his displeasure at the price increases. "Is this product too expensive? Thanks to Erdogan" was written on it, with a photo of the Turkish president next to it. The author was quickly arrested and charged, although acquitted at trial.
Housing in particular has become unaffordable for many people. In November 2023, prices across the country were on average 86.5 percent higher than in the previous year. No other OECD country saw rents rise as sharply as in Turkey in the fourth quarter of 2023, according to statistics from the organization.
Because rent increases are legally limited to 25 percent, many landlords are trying to evict their tenants by any means necessary. Civil courts are reportedly groaning under a flood of rent eviction lawsuits.
The head of the central bank, Hafize Gaye Erkan, also recently complained about the real estate crisis in an interview that made waves. She had been unable to find affordable housing in Istanbul and had therefore moved back in with her mother. According to reports, the head of the central bank earns around 5,000 euros a month, which is one of the reasons why her statements met with a great deal of incomprehension, for example among low earners.
Ten credit cards in your wallet
Erol Günes sells handbags at markets six days a week. With ten credit cards in his wallet, the 50-year-old Kurd and father of two is trying to make ends meet. So far, he has 200,000 lira in debt (a good 5684 francs). Everyone did the same.
At the end of December, debt drove a 42-year-old father of four to throw himself from the third floor of an Istanbul shopping center into the foyer. Clinging to the parapet, he shouted: "I'm hungry, my children are hungry, I'm in debt". The man survived seriously injured.
"Inflation is destroying the middle class and leading to extremes. The rich get richer, the poor get poorer," says economist Seref Oguz. In street surveys, people report that they go to bed hungry and have to start working again at over 70 because their pension is not enough to survive.
The minimum wage, which according to the government is paid to 37 percent of the population, was recently raised to 17,002 lira (483 francs). Trade unions criticized this as clearly too low. According to the workers' association Türk-Is, the poverty line in December was 47,000 lira (around 1336 francs).
Economist Oguz does not believe in the government's forecast that inflation will fall to 34 percent by the end of the year. "In order to bring it down in the long term, the orthodox economic policy must be strictly continued. At the same time, the government must also abandon its populist rhetoric and a strong austerity course must be pursued in public spending."
Last year, the government repeatedly made election gifts worth billions. Observers assume that it will also dig deep into its pockets ahead of the nationwide local elections on March 31 in order to win Istanbul, the country's most populous province, for example.
©Keystone/SDA
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