Turkish lower-income families face 114.4% food inflation: Report

Turkish lower-income families face 114.4% food inflation: Report
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Turkey faces escalating economic turmoil with soaring inflation rates exacerbating financial strain on low-income groups, amid conflicting inflation statistics and government efforts to stabilize the situation, a report by DISK-AR found out

The poorest 20% of the Turkish population faced a staggering food inflation rate of 114.4%, signifying a troubling escalation in the nation's economic adversity and further intensifying the financial burden on low-income families, showed a recent analysis by the DİSK-AR (Confederation of Progressive Trade Unions of Turkey - Research Department,) according to Turkey’s Birgun newspaper.

In what marks a disconcerting trend in Turkey's economy, the inflation rate has spiraled to unprecedented highs, aggravating the financial strain on the country's low-income population segment. According to the data released by the Turkish Statistical Institute (TÜİK), the annual inflation rate surged to 58.94% in August, with a monthly increment of 9.09%. This development follows the recent government policies initiated post-elections that have apparently led to a resurgence in inflation, causing deepening concerns for the already embattled populace.

In a remarkable departure, the statistics presented by TÜİK eclipsed those released by other establishments involved in calculating the inflation rate. Entities such as ENAG and the Istanbul Chamber of Commerce had earlier reported August inflation rates at 8.59% and 8.79%, respectively. The remarkable divergence in the figures has drawn criticism, as many claim that the official inflation rate still does not reflect the real figures experienced by the common citizens, particularly the lower income groups.

August's data underscores that the surge in prices was more pronounced in certain sectors. Restaurants and hotels experienced an increase of 89.31%, followed by the health sector at 77.55%, and food and non-alcoholic beverages at 72.86%. This trend has exacerbated the challenges facing the populace, who are grappling with diminished purchasing power amidst the continuous steep hikes in the prices of basic consumption goods.

Addressing the issue, Finance and Treasury Minister Mehmet Şimşek accentuated that the nation is navigating a transition period. He urged for patience, emphasizing that stringent measures encompassing monetary tightening, adjustments in credit policy, and revamping revenue policies are underway to reign in the inflation and subsequently bring it down. "We are firmly resolved in our fight against inflation, and we believe that the outcomes will justify the perseverance," Şimşek remarked.

Adding to the woes, the Central Bank anticipates the inflation to hover close to the upper limit of the projected 62% by year-end, as per the predictions documented in the Inflation Report.

However, the DİSK-AR (Confederation of Progressive Trade Unions of Turkey - Research Department) argued that the official numbers fail to mirror the actual rates perceived by the population, prompting an initiative to calculate the perceived food inflation rates based on different income groups. Their research concluded that the poorest 20% faced a staggering food inflation rate of 114.4%, while the figure stood at 89.5% for pensioners. Conversely, the wealthiest 20% encountered a considerably lower rate, pegged at 53%.

This scenario delineates a significant variation in the experience of inflation among different societal strata and classes, highlighting a growing disparity between food inflation and general inflation in recent years. As of August 2023, while the Consumer Price Index (CPI) registered at 1,614, the food inflation index soared to 2,329.

Compounding the economic turbulence, the Public Employees' Confederation (KESK) affiliated Office Workers' Union (BES) unveiled the distressing findings of their "Public Employees' Inflation Basket Study". According to their research, the annual inflation for August was a staggering 106.01%, with a monthly rate of 10.25%.

In a statement, BES noted, "The government's 6% salary increment for public servants in the second half is far outpaced by TÜİK's July-August CPI figure of 19.44%, trailing by 13.44 percentage points. This implies that in August 2023, public servants experienced an inflation loss of 17.21 points in their wages. The annual inflation was a massive 106.01%, exceeding the TÜİK's figure by 47.07 points. Meanwhile, the yearly food inflation was 132.59%, surpassing TÜİK's estimates by a whooping 59.73 points."

The revelations pose a grim depiction of Turkey's economic trajectory, underscoring an urgent need for comprehensive strategies to cushion the low-income groups from the biting effects of the soaring inflation. It remains to be seen how the government and financial institutions will steer the nation through these tumultuous economic waters.