Home Outlet store Turkey to open 1,000 markets to counter high inflation, says Erdogan

Turkey to open 1,000 markets to counter high inflation, says Erdogan

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Turkish President Tayyip Erdogan addresses members of parliament as he attends the reopening of the Turkish parliament after the summer recess in Ankara, Turkey, October 1, 2021. Murat Cetinmuhurdar / PPO / Handout via REUTERS

ISTANBUL, Oct. 3 (Reuters) – President Tayyip Erdogan said on Sunday that Turkey had ordered agricultural cooperatives to open around 1,000 new markets across the country in order to offer “adequate” prices for consumer goods in the face of annual inflation of nearly 20%.

Construction of the shops would begin quickly to provide Turks with “cheap and high quality products” and to “balance the markets,” he said, after consumer prices rose to levels well above the official target of 5%.

Frustrated with stubbornly double-digit inflation and declining opinion polls, Erdogan’s ruling AK party government has once again started to point fingers at supermarkets and open investigations into potentially price gouging.

“We have given the order to open around 1,000 of these businesses all over Turkey, starting at 500 square meters each,” Erdogan told reporters after visiting an agricultural credit union in Istanbul.

“These are places where the prices are adapted to the budgets of our citizens,” he said of the outlets.

Annual food inflation of almost 30%, the global rise in commodity prices and the sharp depreciation of the British pound pushed inflation up throughout the year.

Inflation has remained in double digits for most of the past five years, eating away at household incomes and setting Turkey apart from its emerging market peers.

Analysts say the central bank’s reduced credibility is mainly to blame for Turkey’s inflation problem. Erdogan has sacked the last three bank governors over political disagreements.

Under pressure from the president for a stimulus, the bank unexpectedly cut its key rate by 100 basis points to 18% last month, sending the lira to record lows. Read more

Yet in recent weeks the government has started high-profile inspections of Turkey’s largest supermarkets for “unreasonable prices” and “consumer victimization”. He also surveyed some breakfast prices at restaurants in the eastern province of Van.

Vice President Fuat Oktay said on Saturday that increasing food production in villages was vital to avoid price gouging.

In early 2019 – following a currency crisis that drove inflation up – the government opened its own markets to sell cheap vegetables and fruit directly, cutting out retailers it accused at the time to drive up prices.

Editing by David Clarke and Frances Kerry

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