Türkiye is facing a severe economic crisis, with inflation stubbornly hovering around 60%, a figure significantly above the government’s official target as economic instability continue to affect workers living in major cities like Ankara and Istanbul particularly hard, especially as a result of high cost of living in the State.
Even though Türkiye reported a 4.5% GDP growth in 2023, largely due to pre-election stimulus measures, many citizens have not felt the benefits. Inflation has drastically reduced purchasing power, leading to increased poverty, especially among workers whose wages have failed to keep up with the soaring costs of essentials.
The Turkish government has attempted to stabilize the situation by implementing several economic measures, including significant interest rate hikes aimed at curbing inflation. Recently, the central bank raised its policy rate to 45%, but when adjusted for inflation, real interest rates remain negative, making economic recovery more challenging.
Workers in Türkiye are bearing the brunt of the crisis, with many struggling to afford basic necessities. Despite a relatively high minimum wage, the financial strain on the majority of the workforce remains severe. The economy is further burdened by low productivity, a shortage of skilled labor, and a lack of investment in technology, all of which contribute to a difficult working environment.
The Turkish government is under immense pressure to resolve the crisis while managing growing public dissatisfaction. Analysts suggest that the outcome of the elections could play a pivotal role in shaping future economic policies and reforms.
President Recep Tayyip Erdoğan’s administration is facing criticism for its economic management, with calls for a return to more traditional economic practices. The opposition has emphasized the need for reforms to restore economic confidence and improve living conditions for workers.
Looking forward, the International Monetary Fund (IMF) projects that Türkiye’s economic growth may slow to around 3.25% in 2024. The Turkish government faces the daunting task of promoting economic recovery while tackling high inflation and interest rates that continue to suppress private consumption and investment.
