“A tall Starbucks Americano costs 250 lira (about 9,200 won).”
On the 7th (local time), the press corps that visited Istanbul Airport received this bill. At the food court in the airport, a beer costs 650 lira (about 23,000 won), a banana is 230 lira (about 8,300 won), and a McDonald’s Big Mac set is sold for 800 to 900 lira (about 33,000 won).
Istanbul Airport has recently been cited as one of the airports with the highest prices in the world. Travelers report that prices are 2 to 4 times higher than at airports in Frankfurt or New York.
It is not just the airport. The next day, at the shopping mall 'The Land of Legends' in Antalya, a packet of Korean spicy chicken flavored noodles was sold for 390 lira (about 14,000 won).
The problem is that this high cost is not just burdensome for foreigners. Türkiye is in the midst of a deadly inflation.
According to the Türkiye Statistical Institute (TÜİK), the annual consumer price inflation rate in 2023 is a staggering 64.77%. It remains high, even after surpassing the peak rate of nearly 85% in 2022. In 2024, the annual inflation rate is expected to reach 44.38%, and inflation concerns are not easily quelled.
In contrast, wages are unable to keep pace with this rate. According to the Türkiye Statistical Institute, the average net monthly salary in 2024 is 17,480 lira (about 630,000 won). Despite the government raising the minimum wage by 30% this year, it is still insufficient to support living expenses.
The 'hunger line' calculated by labor groups, which indicates the amount needed for a family of four to cover minimum food expenses, is 22,131 lira (about 800,000 won), which is actually higher than the average wage.
The issue of housing costs is also serious. In particular, in the capital Ankara and the major city Istanbul, the average rent is around 20,000 lira (about 720,000 won). A typical employee’s entire monthly salary would not be enough to cover rent.
Fulya, a 40-something employee met locally, said, “With the money I earn, it is impossible to even cover the rent.” She noted that “many citizens are managing by alternating the use of multiple credit cards.” He lamented, “As the government fails to control prices, the lives of ordinary people are becoming increasingly difficult.”
This cost of living crisis is driving even the middle class, which used to be the backbone of Turkish society, into poverty. Erol Bilecik, the former president of the Turkish Industry and Business Association (TÜSİAD), pointed out in a media interview that “high inflation, skyrocketing living costs, extremely deteriorated income distribution, and the declining purchasing power of the middle class are currently the most serious problems Türkiye faces.”
Türkiye's inflation is a result of intertwined political instability and structural vulnerabilities.
In March, Istanbul Mayor Ekrem İmamoğlu was abruptly detained on charges of corruption and supporting terrorism, leading to a 12.7% plummet in the value of the lira against the U.S. dollar, which in turn fueled inflation through rising import prices.
Additionally, the government raised electricity prices for residential use by 25% and for industrial use by 10% last month, with natural gas prices also increasing. As energy expenses, which directly affect prices, soar, the cost of living for citizens has skyrocketed.
The Central Bank raised the benchmark interest rate consecutively from 42.5% to 49% in March and April, but it has been deemed insufficient for defending the lira and curbing inflation.
The government has set a goal to reduce the inflation rate to 21% by the end of 2025, but complex risks such as political instability and a decrease in foreign reserves remain. Experts argue that restoring political trust and implementing structural reforms are essential for long-term price stability in Türkiye.
Saying that raising interest rates alone cannot curb inflation is evidence that the Turkish economy is very vulnerable to external shocks, Prof. Jeong Dae-young of Yonsei University's Department of Economics emphasized, “Simple interest rate adjustments will not restore market confidence; political stability and coherence in macroeconomic policies must take precedence.”