The Turkish government’s new austerity plan, unveiled Monday by Vice President Cevdet Yılmaz and Finance Minister Mehmet Şimşek, has sparked criticism from labor unions, economists and politicians, who argue that the measures disproportionately affect people on low incomes while sparing the wealthy.
The “Savings and Efficiency Package in the Public Sector,” which aims to curb inflation and reduce public spending, includes a range of cost-cutting measures. These include a three-year moratorium on the purchase or rental of new vehicles, furniture and office equipment for the public sector and a halt to the construction or purchase of new public buildings, with the exception of those required for health, security or defense.
“These austerity measures signal that tougher times are coming for workers, [other] employees and pensioners,” tweeted Arzu Çerkezoğlu, chairman of the Confederation of Progressive Trade Unions of Turkey (DİSK). “The package does not address exorbitant payments to favored [pro-government] contractors or luxury expenses for the presidential palace. It also does not remove tax privileges for the wealthy.”
Economists and prominent politicians joined the chorus of disapproval.
Economist Mahfi Eğilmez argued on X that the austerity measures would be ineffective without addressing the wasteful spending on the presidential palace, airplanes and convoy.
“No one will follow the rules that are flouted by those who set them,” he said.
Opposition party leaders echoed these concerns.
“This is a hidden IMF program,” said Özgür Özel, leader of the main opposition Republican People’s Party (CHP). “Limiting new hires to the number of retirements over the next three years is a serious problem for workers. The austerity measures are essentially an attempt to put the burden of fiscal discipline on the public.”
The government expects the austerity measures to reduce public spending by 100 billion lira ($3.1 billion). Funds for the purchase of goods and services by state institutions will be cut by 10 percent, and investment budgets will be reduced by 15 percent, with the exception of regions affected by last year’s earthquakes.
Civil servants will no longer be allowed to use imported vehicles, and funding for transportation and entertainment expenses will be cut by 25 percent. In addition, the salaries of civil servants serving as board members in state-owned companies will be cut.
The austerity measures could also have an impact on local administrations, especially those run by opposition parties. This comes against the backdrop of the March 31 local elections, which saw the CHP emerge as the leading party for the first time in 47 years, securing 37.7 percent of the vote, maintaining control of key cities and securing substantial gains in other regions, while Turkish President Recep Tayyip Erdoğan’s Justice and Development Party (AKP), for the first time in 22 years, came in second, garnering only 35.4 percent of the vote.
“This package seems to be aimed at weakening CHP-run municipalities,” CHP spokesman Deniz Yücel was quoted by Deutsche Welle’s (DW) Turkish edition as saying.
Dr. Özgür Müftüoğlu, an expert in labor economics, warned that the plan could exacerbate existing problems.
“The austerity measures will make the daily lives of public sector workers more difficult rather than tackling the causes of the economic crisis,” Müftüoğlu told DW. “Focusing on cutting benefits and essential services will only increase the burden on workers.”
The government insists the measures are necessary to tackle inflation, which reached almost 70 percent year-on-year in April, and to recover from the economic impact of the 2023 earthquakes.
“Our priority is to tackle the high cost of living. Low, single-digit inflation is essential for sustainable growth,” Finance Minister Şimşek said at the announcement.
Since taking office in June 2023, Şimşek has shifted Turkey’s economic policy to conventional approaches and raised interest rates by 41.5 percentage points to 50 percent to combat inflation.
The Turkish Central Bank predicts that inflation will peak at around 76 percent this month before falling to 38 percent by the end of the year.