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Inflation storm worsens Turkey’s income distribution gap

Banks and big companies have benefited from Ankara’s controversial policy to keep interest rates low, while soaring inflation eats into the real income of the wage-earning masses.
A customer leaves a currency exchange agency near Grand Bazaar in Istanbul, on Dec. 2, 2021.
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Turkey’s galloping inflation, on course to top 100% in the fall, has been causing daunting income transfers from the poor to the rich, worsening further the income distribution gap in the country, economic data show.

Annual consumer inflation, which stood at less than 20% in September 2021, skyrocketed in six months to reach 61.1% in March. The sharp uptick has rendered pay rises in the beginning of 2022 irrelevant, stoking real income losses. Along with wage- and salary-earners, agricultural producers, too, have taken severe blows from inflation, with the gap between agricultural product prices and industrial prices growing to the detriment of farmers. 

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