Elif Aydin is a 25-year-old student living in a low-income district of Istanbul. “Every time I go to the market I see other prices,” he says. “I used to get two things with the same money, now I don’t have enough for one.” Her descriptions are not isolated facts. Consumers and producers are constantly struggling with inflation. According to the Turkish Statistical Service, last October the percentage rose by 19.89 on an annual basis, an increase of 7 points compared to October last year. At the same time, there is a suspicion that the official data do not reflect real inflation. According to an independent committee, called the Inflation Research Group, the rate of price increase in October reached 49.87%. The pressure is not going to stop.
Reducing purchasing power by half
Economist Ezlem Derici Sengil told Deutsche Welle that monthly increases in food and energy prices would continue. “There are serious discrepancies between consumption and production indices. “Producers have not calculated the increases in the prices of their products and will not be able to withstand the pressures for more than three months.” Digital designer Aydin Savour says he feels the price increases in his skin despite the regular increases in his salary. “I can say it with a clear conscience, when I see my purchases in the basket. Wage increases are of little use because they are shrinking. It’s a normal financial bleed. “Within a year, the purchasing power was reduced by half.” And it makes sense. Because price increases in commodities “eat” income and reduce the purchasing power of those who receive the minimum wage. The reason is the Turkish pound’s dependence on the dollar and the euro. Because, while the minimum income in 2015 was 1000 pounds, in 2021 it rose to 2835 pounds. In reality, however, the purchase value has decreased over the past six years due to the devaluation of the pound against the euro and the dollar.
The sharp rise in food prices has brought about changes in Turkish eating habits. For people it is important to meet their basic needs, the rest is for many types of luxury. Meat, for example, is hit hardest by rising food prices. And it is one of the basic items in the Turkish diet. According to the so-called red meat council, the price of beef slaughterhouses rose by 35.31 Turkish lira in early November 2020. A year later their price reached 48.11 Turkish pounds. During the same period, the price of ground beef rose by at least 30%. Other meat products, such as beef fillet, beef shoulder or steaks, increased by 60%.
“The inflation order”
Girkan Kerr, a 41-year-old worker from Livyssa, also complains that his salary is no longer enough to make ends meet. “Compared to last year, life has been difficult,” he says. “If all goes well we can buy poultry once a month. For olives that we used to give 27 pounds, now they cost 50 Turkish pounds. “I do not want to burden my family, but I do it for better or worse.” It is not only the citizens who suffer, but also the shop owners, traders and producers. The gap between the producer price index, at 46.31, is as high as it has not been in 19 years, while consumer prices are constantly rising. Conversely, this means that producers produce at higher prices but have to sell at lower prices. The president of the Confederation of Turkish Small Businessmen and Craftsmen, Bdevi Paladeken, told DW that most sell their products at a cost-free, non-profit price. Economist Arda Tunka argues that people’s everyday experiences lead them to lose confidence in the institutions. Tunka explains that the prices that people see in the markets on a daily basis do not correspond to the data of the statistical service. But consumers were forced to accept them.
“Everything that happens happens on the streets,” he says. “Turkey has made wrong decisions in monetary policy. Even the middle class is no longer talked about. Revenues are constantly shrinking. “Inflation has created a new order.” Arda Tunka calls it the “inflation class” and notes that under normal circumstances, high-income groups create jobs and support production. “But this class is using its investments in the wrong direction. “It prefers to profit from inflation.” Over the last 7.8 years, Turkey has grown, but not in terms of individual income. “We have moved away from a sustainable policy. People are in debt. “Big mistakes were made.”
DW – Emre Eser / Irini Anastassopoulou
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