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Cost of living skyrocketed in İstanbul in March amid depreciation of Turkish lira

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A survey conducted by the İstanbul Planning Agency (IPA) has revealed that the cost of living in Turkey’s most populous city increased by more than 86 percent in March compared to the same month of 2022 due to the depreciation of the Turkish lira.

The IPA, which was established in 2020 under the İstanbul Metropolitan Municipality, calculated the cost of living in İstanbul for a family of four to be TL 31,788 ($1,653) in March, showing an average annual increase of TL 1,225 ($63) in comparison to 2022.

As part of the survey, 1,600 families were selected in İstanbul, which has a population of more than 15 million, and reports have been drafted based on their monthly spending for basic necessities.

Products that saw the highest increase in prices were meat, at 20 percent, dental care products, 8.8. percent, eggs, 7.9 percent, and diapers at 5.9 percent.

More than 40 percent of Turkey’s workforce earns the minimum wage allowed by law, which was set for a third time by the government last year at TL 8,500 lira ($442) due to the loss in value of the lira.

Turkey’s poor have been hit the hardest by an economic crisis that saw the official annual rate of inflation reach 85 percent last year.

In March the Confederation of Turkish Trade Unions (TÜRK-İŞ) announced that the starvation line for a family of four increased to TL 9,590 ($494), while the poverty line increased to TL 31,240 ($1,624).

The starvation line indicates the minimum amount of money a month needed to save a four-member family from starvation, while the poverty line indicates the money needed for a family of four to feed itself sufficiently and healthily. It also covers expenditures on basic necessities such as clothing, rent, electricity, water, transportation, education and healthcare.

Turkey’s latest economic crisis started when President Recep Tayyip Erdoğan — a lifelong opponent of high interest rates — pressured the central bank to bring down chronically high consumer prices by lowering borrowing costs.

Conventional economic theory urges policymakers to fight inflation by curbing demand and raising the price of doing business through higher interest rates.

Erdoğan’s approach set off a currency crisis that saw the lira lose nearly half its value in a matter of weeks in late 2021.

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