Turkey is grappling with soaring inflation, the highest since 2003, which was the first full year in power of the Justice and Development Party (AKP). In September, year-on-year inflation reached 24.5% in consumer prices and 46% in producer prices. The inflation dynamics indicate that the year-end figures could climb to between 30% and 35% in consumer prices and between 50% and 60% in producer prices.
Consumer inflation had been in single digits since 2003, excluding last year, when it reached 11.9%. The current surge is a new situation that makes wage earners and pensioners relatively poorer as they fail to increase their incomes in line with price increases. The biggest fear of working people, however, is that they could end up with no income at all if the slowing economy spawns a new wave of layoffs. For those indebted to banks, the reasons to worry are even bigger.