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Türkiye continues to struggle with extremely high inflation. According to the Turkish Statistical Institute, the annual inflation rate reached almost 65 percent in December 2023.
This development has devastating consequences for the Turkish population. Not only are apartment rents, cars, and other essential goods now unaffordable for most people, but simple everyday items are also turning into luxury goods. Some supermarkets put only everyday items (butter, toothpaste, olive oil, and the like) on shelves with alarm protection, Business Insider reported. This was despite Turkey reducing VAT on food to 1 percent from 8 percent a year ago.
The middle class is especially affected. Food is increasingly avoided. Retirees are forced to return to work to make ends meet. The Ministry of Labor increased the minimum wage by 49 percent to 17 thousand lira (about 482 francs) at the beginning of 2024. But is this enough? If Turkey can reduce inflation to 36 percent in 2024 as predicted, there will be an increase in real wages.
However, the 2023 prediction was far from reality. According to the employee representative Türk-İş, the poverty line is already 47,000 lira (about 1,333 francs), which is well above the minimum wage level.
This is what the weakness of the lira means for Switzerland
Although the Turkish government has implemented long-overdue interest rate measures to counter inflation in 2023, the lira remains extremely weak. It lost more than 75 percent of its value against the Swiss franc last year.
Does this mean holiday prices in Turkey will continue to fall? “Package tour prices are quite stable because tour operators usually buy hotel beds in euros and prices depend on demand and demand is very strong at the moment,” says Deniz Uğur (45) of Zurich Turkey specialist Bentour Reisen. But he acknowledges that local services (golf, health, food, shopping) have become significantly cheaper thanks to the strong franc.
A good meal for two in a restaurant usually costs around 20 francs, including drinks. “In Istanbul, where many people are still wealthy, prices can still be significantly high, especially in tourist facilities,” says Uğur.
According to Seco data, Switzerland primarily imports textiles and metal, and to a lesser extent agricultural products, from Turkey. Representatives of the Turkish business world will be present at the World Economic Forum to be held in Davos.
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
