According to the most recent official numbers, prices in Turkey are rising at their quickest rate in 24 years. In June, the annual rate of inflation, or the rate at which prices grow, was 78.62 per cent, somewhat more than expected.
Transportation and housing prices rose the most, exacerbated by the Ukraine crisis. Inflation has risen since last year, when Turkey's president reduced interest rates in an attempt to stimulate the economy.
Typically, countries would raise interest rates in an attempt to reduce inflation. However, President Recep Tayyip Erdogan has referred to interest rates as "the mother and father of all evil" and has utilised unconventional policy to try to cool prices, including meddling in foreign exchange markets.
Interest rates were slashed from 19 per cent to 14 per cent last year, causing the Turkish lira to decrease in value, making it more expensive for the country to buy products from overseas.
According to the most recent inflation estimates, transportation prices have risen 123 per cent in the last year. Food and non-alcoholic beverages followed closely behind, with price increases of 94 per cent, while furniture and domestic equipment increased by 81 per cent.
The overall inflation figure was the highest since September 1998, when Turkey was trying to halt a decade of chronically high inflation.
Price increases are making it difficult 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 installments, or are shortening their planned holidays, to make it affordable for them."
(Source:www.flipboard.com)
Transportation and housing prices rose the most, exacerbated by the Ukraine crisis. Inflation has risen since last year, when Turkey's president reduced interest rates in an attempt to stimulate the economy.
Typically, countries would raise interest rates in an attempt to reduce inflation. However, President Recep Tayyip Erdogan has referred to interest rates as "the mother and father of all evil" and has utilised unconventional policy to try to cool prices, including meddling in foreign exchange markets.
Interest rates were slashed from 19 per cent to 14 per cent last year, causing the Turkish lira to decrease in value, making it more expensive for the country to buy products from overseas.
According to the most recent inflation estimates, transportation prices have risen 123 per cent in the last year. Food and non-alcoholic beverages followed closely behind, with price increases of 94 per cent, while furniture and domestic equipment increased by 81 per cent.
The overall inflation figure was the highest since September 1998, when Turkey was trying to halt a decade of chronically high inflation.
Price increases are making it difficult 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 installments, or are shortening their planned holidays, to make it affordable for them."
(Source:www.flipboard.com)
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