STORY: Price rises, tax hikes make Turks feel worse-off
DATELINE: July 15, 2023
LENGTH: 00:03:24
LOCATION: Ankara
CATEGORY: ECONOMY

SHOTLIST:
1. various of people on the streets in Türkiye
2. various of Turkish Lira and U.S. dollar
3. various of people at shopping in a fresh vegetable bazaar in Türkiye
4. SOUNDBITE 1 (Turkish): JALE TASIYAN, Hotel Employee
5. SOUNDBITE 2 (Turkish): MURAT KOCAS, Graduate student in Civil Engineering

STORYLINE:

Turkish consumers are facing a new wave of stinging price increases and tax hikes as the value of the national currency continues dipping against the background of a cost-of-living crisis.

Jale Tasiyan, a 46-year-old hotel employee, told Xinhua that mounting living expenses are forcing him to consider leaving Türkiye.

SOUNDBITE 1 (Turkish): JALE TASIYAN, Hotel Employee
"I want to leave Türkiye. I want to take my children and my family to live in Germany.
Life is very expensive here, it is impossible to make ends meet in Türkiye anymore, even though three people are working in my family.
Because of the economy, we abandoned everything that could be considered a luxury, such as going to a cafe once in a while, there we stay at home.
I have 15 days off work but we can't go on holiday, because the price of a week of the holiday will cost us about 100,000 liras, we cannot afford it.
I have no hope regarding the future, and I am very sad for my children and the youth in general.
In the past years, I have the feeling that we got poorer, 20 years ago I could buy whatever I wanted for my house. Now it has become impossible.
You caught me on my way to a second job, I am working in a kitchen to help the family budget."

In early July, the Turkish government increased the value-added tax on goods and services to 20 percent from 18 percent, making Turkish people's life even more costly amid high inflation.

Under the substantial tax hikes, taxes on registering new mobile phones in Türkiye have more than tripled, promoting thousands of Turks to rush to neighboring Georgia to buy smartphones and register them before the tax hikes took effect on Monday, local media reported.

The moves came after the introduction of a draft law in the parliament last week that envisages increasing corporate tax to 25 percent from 20 percent for quake-related funding. The government said rebuilding projects would cost an estimated 100 billion U.S. dollars.

The country's annual inflation rate dipped to 38.21 percent in June from a peak of 85 percent in October 2022, according to figures released by the Turkish Statistical Institute on July 5. However, consumers have remained highly price-sensitive.

To ease the burden of households, the government introduced salary hikes for 4 million civil servants and pension hikes for more than 15 million retirees in July while increasing the minimum wage by 34 percent in late June for low-income workers.

These measures were in line with President Recep Tayyip Erdogan's promise to address the cost-of-living crisis in the country after he won re-election in May.

However, the continuing depreciation of the Turkish lira against foreign currency has eroded the government's efforts. In just two weeks, the minimum living wage decreased by about 40 dollars before civilians benefited from minimum salary increases beginning on June 1.

There are also concerns that wage hikes could inadvertently cause higher inflation.

Since the start of the year, the Turkish lira has lost more than 30 percent of its value, leading to a price surge in exported goods, especially food, in the import-reliant country.

In addition, high rents have burdened students who were to enter society after graduation. Murat Kocas, a student in his last year at Ankara University, told Xinhua that housing has become a pressing issue for him.

SOUNDBITE 2 (Turkish): MURAT KOCAS, Graduate student in Civil Engineering
"Market prices have risen considerably so have fuel prices.
As I am living in another city, my parents and I have difficulties meeting my daily expenses such as housing and food. Socializing is a real burden. Before we use to go out several times a week with friends now we can only meet up once a week.
Housing is a real trouble. I am staying in a student dormitory, but its price has tripled recently.
I was thinking of renting a house but rents have risen astronomically, therefore this option is out of the question.
The new term will begin in September and I don't know what to do, student residence or a flat, but both are very expensive."

According to Enver Erkan, chief economist at Istanbul's Dinamik Investment Securities, inflation may gain momentum in the second half of the year.

"The budget deficit may have an upward effect on inflation in the second half of the year through the government's tax and price policies," Erkan said.

Xinhua News Agency correspondents reporting from Ankara.
(XHTV)