According to the latest official data, prices in Turkey are rising at the fastest rate in 24 years. The annual inflation rate, the pace at which prices move, hit 78.62% in June, slightly higher than expected.
Some sharp increases were seen in transportation costs and housing prices, made worse by the Ukraine War.
Inflation has risen since last year when the Turkish president cut interest rates to boost the economy.
Typically, countries will raise interest rates in an attempt to quell inflation. But President Recep Tayyip Erdogan has described interest rates as the “father and father of all evil” and used more unorthodox policies to drive down prices, including intervening in foreign exchange markets.
A cut in interest rates from 19% to 14% last year has led to a fall in the value of the Turkish lira, meaning it costs the country more to import goods from abroad.
In the latest inflation data, transportation saw the most significant cost increase, climbing 123% over the previous year.
Prices for food and non-alcoholic beverages increased by 94 per cent, while the cost of furnishings and home appliances increased by 81 per cent. The overall inflation figure was the highest since September 1998, when annual inflation reached 80.4%, and Turkey struggled to end a decade of high inflation.
The surge in prices is making it tough for businesses.
“I’ve never experienced a season like this before,” said hotelier Volkan Yorulmaz, the general manager of Kemer Holiday Club in Antalya. “I can’t budget my spending because the costs change from day to day. The all-inclusive concept is no longer sustainable.
“Over 50% of our guests come from Russia or Ukraine, so without them, the beginning of the season was a little problematic.
“Turkish people are trying to come on holiday. They use credit cards, or pay in instalments, or are shortening their planned holidays, to make it affordable for them.”