Turkey's skyrocketing food prices show no sign of slowing
Ill-advised policies over the decades have reduced Turkey to a net food importer despite its significant agricultural potential, fueling a dramatic increase in food prices that deals the hardest blows to the poorest citizens.
Turkey’s consumer inflation overshot expectations in October, climbing 2.67% and bringing year-on-year inflation to 25.2%, much to the chagrin of Treasury and Finance Minister Berat Albayrak, the president’s son-in-law, who had declared an “all-out fight against inflation” in mid-September.
The details of the inflation data, released Nov. 5, show that food prices shot up nearly 30% from October last year. In the subcategory of fresh fruits and vegetables, the increase was even more staggering, hitting 50%.
For Turkey, such inflation is unprecedented since 2004. The sharp increases in food prices hit low-income groups especially hard, as they spend a significant part of their budget on food. According to official statistics for 2017, the largest item in household spending was housing and rent at 24.7% of total spending, followed by food at 19.7%. The lower the income, the larger the share spent on food. Impoverished households in the bottom 20% on the income scale spent 29% of their budgets on food.
Coupled with economic contraction and increasing unemployment, the surging inflation owes much to a structural setback, namely an insufficient supply in agricultural products or a food deficit. The concerned authorities, including the Central Bank, agree that Turkey will struggle to get rid of double-digit inflation unless these problems are resolved.
