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Market scene in Bursa, Turkey (archive image)
Photo: Moe Zoyari/Bloomberg/Bloomberg/Getty Images
In view of the very high inflation in the country, the Turkish government has announced a reduction in VAT on staple foods from eight to one percent.
Turkish President Recep Tayyip Erdoğan said in a televised speech on Saturday that he expects prices in shops for rice, meat, fruit and vegetables, dairy products and eggs to fall accordingly from Monday.
The tax on flour and bread is already one percent.
Inflation in Turkey had recently accelerated from an extremely high level.
According to official figures, consumer prices rose by 48.7 percent in January compared to the same month last year.
The country is struggling with a currency crisis.
The lira continues to lose value, which makes imported goods more expensive.
After a dramatic fall in 2021, the Turkish government has managed to stabilize the national currency by covering losses from currency fluctuations under certain conditions.
The resentment grows
So far, however, nothing has changed in the loose orientation of Turkish monetary policy, which experts say is the main reason for the weak lira.
President Erdoğan is a declared opponent of high interest rates, which economists recommend as a remedy for high inflation.
Erdoğan, on the other hand, would like to boost credit and investment through low interest rates - but this will continue to increase the amount of money in circulation.
At the turn of the year, energy prices in the country had literally exploded.
Electricity prices for households were raised by around 50 percent.
Food and transport had also become more and more expensive recently.
In view of the situation in the country, people's displeasure is also growing.
There have been minor protests recently.
The largest opposition party, the CHP, warned on Wednesday that many people would become poor.
yes/dpa
