Turks have started the new year with news of jacked-up prices, fueled by a currency crisis amid the highest rate of inflation in nearly two decades.
Turkey’s Energy Market Regulatory Authority (EPDK) said on Saturday that it had raised electricity prices by around 50 percent for lower-demand households for 2022, and more than 100 percent for high-demand commercial users.
Natural gas prices rose 25 percent for residential use and 50 percent for industrial use in January, Turkey’s national distributor Petroleum Pipeline Corporation (BOTAŞ) said separately. The increase was 15 percent for electricity-generating industrial use.
On Friday the price of one liter of gasoline increased by 61 kuruş from TL 12.4 to TL 13, while a liter of diesel saw its price increase by TL 1.29 from TL 11.45 to TL 12.74.
One price hike drew particular criticism as the government lowered the tolls for bridges on the Bosporus while changing the one-time charge to two charges, making drivers pay the same amount twice. Previously, drivers were paying TL 13 for a return trip across the bridges. While the government reduced the amount charged for the first crossing to TL 8, it started charging for the return trip as well, making the toll TL 16 in total.
The prices of alcoholic beverages and tobacco products are also expected to increase. On Monday, the government announced an increase in the special consumption tax on both products by 47 percent.
Again on Monday, Turkish State Railways (TCDD) increased prices for tickets of high-speed trains operating among the cities of İstanbul, Ankara, Eskişehir and Konya by 20 percent.
Turkey’s annual inflation rate has surged to its highest level since 2002, according to official data. Consumer prices in the country jumped to 36.08 percent last month from the same period in 2020, up from 21.3 percent in November, according to the Turkish statistics office.
However, the majority of Turks believe inflation is higher than 100 percent.
62% of Turks think inflation is more than 100%. Incredible https://t.co/C9Uma9yHhG
— Mark Bentley (@MarkABentley) January 3, 2022
According to a survey conducted by Metropoll, 61.5 percent of respondents said they believe the inflation rate is higher than 100 percent, while 28.5 percent said it is higher than 50 percent.
According to the Inflation Research Group (ENAG), an independent group of academics who are working on key data that map the country’s economic performance, Turkey’s rate of inflation in December is far higher than the officially announced figure. ENAG said it calculated the rate at 82.81 percent rather than 36.08 percent as announced by the Turkish Statistical Institute (TurkStat).
The group started calculating economic figures amid rising suspicion over manipulation of Turkey’s official economic data by the ruling Justice and Development Party (AKP).
Trust in official figures, mainly the inflation and unemployment rates, has deteriorated since the switching of the country’s parliamentary system to an executive presidency in 2018.
Erdoğan made a mess of it: opposition
“To the economic genius residing in the [presidential] palace, you have made a mess of everything you touched,” Turkey’s main opposition Republican People’s Party (CHP) leader Kemal Kılıçdaroğlu said, referring to Turkish President Recep Tayyip Erdoğan, after TurkStat announced the official inflation rate.
“TurkStat announced the annual consumer price index as 36.08. Even with the manipulated numbers, the Producer Price Index is near 80 percent. This means less production and costlier living,” Kılıçdaroğlu tweeted on Monday.
A steady deterioration in Turks’ purchasing power has further hurt Erdoğan’s dropping approval rating as the president’s enduring success has often been attributed to the development and prosperity his government enabled after a financial crisis in 2001.
Erdoğan and his AKP have dominated Turkish politics for the past two decades, but he faces an increasingly difficult path to re-election in polls due to be held in 2023.
The Turkish lira lost 44 percent of its value against the dollar last year, with the losses accelerating at the end of 2021, when Erdoğan’s unorthodox aversion to interest rates led to a series of sharp rate reductions.
Erdoğan has gone against orthodox economic thinking as part of a “war of economic independence,” arguing repeatedly that high rates push up inflation.
The dollar had soared to a historic high of nearly 18.4 lira by the time Erdoğan announced new currency support measures last month.
The exchange rate has since slipped back down to around 13 lira to the dollar, although the Turkish currency lost a further 2 percent after the inflation rate was announced. A dollar was worth 7.4 lira at the start of 2021.
The embattled president vowed in December to rein in inflation decimating Turks’ purchasing power, while economists claim the promise is highly unlikely to come true.