New numbers for last month released Monday (August 5) by the Turkish Statistical Institute (TÜİK) show around a 10% drop in yearly inflation compared to June.
While yearly inflation had been estimated at 71.6% in June, TÜİK’s numbers for July estimate this figure at 61.58%.
Şimşek’s promised ‘disinflation phase’
Turkish Finance Minister Mehmet Şimşek, appointed in June 2023 following President Recep Tayyip Erdoğan’s reelection in May of that year, has for months promised that Turkey would enter a ‘phase of disinflation’ in the second half of 2024.
Şimşek’s promised ‘disinflation’ comes after a year of unpopular austerity measures. A refusal to hike pensioners checks in the spring was widely seen as having contributed to Erdoğan’s party’s poor showing in local elections in March. Additionally, Şimşek has repeatedly declared that Turkey’s minimum wage would not receive a mid-year hike in 2024 as was common in previous years.
Turkey’s current minimum wage of 17,002 Turkish Liras per month has been criticised as falling below the hunger limit.
While pensioners’ checks were finally hiked in July, the minimum wage has remained unchanged, amidst concerns expressed by Şimşek that a hike could hinder the fight against inflation.
The long-awaited ‘disinflation phase’ comes after over a year of persistent inflation following Erdoğan’s reelection. In July 2023, Turkey recorded the highest monthly inflation numbers ever recorded in the Justice and Development Party (AKP)’s 20-plus year rule.
Highest increases seen in education, restaurant, and health care costs
Compared to prices from July 2023, prices in education, health care, housing, and restaurants and hotels showed the biggest increase.
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TÜİK’s July data showed a small drop in prices for clothing and shoes.
Inflation Research Group (ENAG), which also published data for July, showed a sharp increase in clothing and shoe prices. ENAG also showed numbers indicating that health care costs had remained unchanged month-to-month.
ENAG also showed higher inflation numbers for July, indicating a yearly inflation of 100.88%, nearly 40 percentage points higher than the number given by TÜİK.
By: Leo Kendrick
