Ankara: Despite a significant drop in the Turkish inflation rate in recent months, high prices remain a hot topic in the run-up to the country’s general elections, as households continued to feel the bite of the high cost of living.
Turkey has been grappling with both economic woes and the aftermath of devastating February 6 earthquakes that claimed over 50,000 lives, reports Xinhua news agency.
President Recep Tayyip Erdogan is seeking a new term of five years against his main rival Kemal Kilicdaroglu, head of the Republican People’s Party, who is running for an alliance of opposition parties.
The presidential and parliamentary elections are scheduled on May 14.
If no candidate secures more than 50 per cent of the votes in the first round of the presidential vote, a second round will be held on May 28.
According to recent opinion polls, it is going to be a neck-and-neck race between the two predominant candidates who have both promised better living quality and social standards for millions of households battered by runaway inflation.
Turkey’s annual consumer prices index (CPI) dropped for five consecutive months to 50.51 per cent in March from 85 per cent in October 2022, official data revealed this month.
However, prices are still increasing on a monthly basis, with the monthly CPI rising by 2.29 per cent in March, Turkish Statistical Institute said.
More than 40 per cent of Turkey’s workforce earns the minimum wage, which was increased for a third time by the government last year at 8,500 liras ($44) due to the loss in value of the lira.
According to analysts, pre-election government spending and currency pressures may lead inflation back to an upward trend.
Enver Erkan, the chief economist at Istanbul’s Dinamik Investment Securities, said that the drop in inflation will stop in the second half of the year.
“Inflation pressure will be high within the framework of a possible rise in the exchange rate (of the dollar/lira pair) and the government’s pre-election revitalization plans,” he told Xinhua.
The lira has lost over 70 per cent of its value against the greenback since the beginning of 2022. It has declined further to new record lows against the dollar since the start of March.
One of the main consequences of this devaluation is inflation as Turkey is a big importer of energy and other commodities.
Erdogan has increased wages and pensions, slashed energy bills, and allowed some two million workers to retire with immediate effect.
Despite criticism of its economic policies, the President has still significant backing amongst voters who believe he is the best person to lead Turkey.
–IANS