Levent Gürses
Despite the astonishing data on poverty and the fact that the government should be spending tax revenues on social policies for the broad masses, it has been revealed that it has relinquished huge amounts of revenue in favour of the capital sector.
17 October was the International Day for the Eradication of Poverty. Or World Poverty Day…
The Deep Poverty Network and the United Nations (UN) highlighted the state of poverty in Turkey and around the world. Hacer Foggo, founder of the Deep Poverty Network, emphasised that poverty is no longer just an economic problem, but also a social and human one. Sharing the report they prepared, the Deep Poverty Network shared the results of their interviews with 108 households.
The data shared by the Deep Poverty Network is as follows:
- 97 households are experiencing food insecurity.
- 93 households are struggling to cover their children’s school expenses.
- 71 households have experienced at least one electricity, water or gas cut in the last two years.
- 84 households are experiencing fear of homelessness.
- 51 households have moved more than once because they cannot pay their rent.
- 93 households cannot afford healthcare costs.
- 22 children have dropped out of formal education; those over the age of 15 have started working.
- 91 households struggle to provide breakfast for their children every morning. 16 of them cannot provide breakfast on any day of the week.
The United Nations has failed to make progress in 33 years
The United Nations declared 17 October as the International Day for the Eradication of Poverty with a resolution adopted on 22 December 1992. Despite the claim that ‘raising awareness of poverty will bring about policy change,’ in the 33 years since, the segments at the bottom of the global income justice pyramid have been unable to escape the quagmire of poverty. UN data also admits that no progress has been made in eradicating poverty since 2019.
The UN announced the theme for Poverty Day 2025 as ‘Ending social and institutional mistreatment by respecting and effectively supporting families.’
The UN emphasises that ending poverty is not just about income, but also about dignity, justice and belonging. This year’s theme focuses on ending social and institutional mistreatment by providing respect and effective support to poor families, who often face stigmatisation and punitive practices in aid settings.
700 million people living in extreme poverty survive on less than $2.15 per day
According to poverty data, 700 million people worldwide live in extreme poverty, surviving on less than $2.15 per person per day. One billion people worldwide struggle to make ends meet on an income of between $2.15 and $3.65 per day.
Approximately half of the world’s population, or 3.5 billion people, live on less than $6.85 per day.
1.1 billion people lack access to health and education services.
Approximately 1.1 billion people face acute multidimensional poverty, experiencing overlapping deprivations in health, education and living standards; gaps within countries can exceed gaps between countries.
Climate shocks hit the poor hardest: the world’s poorest half contribute little to emissions but bear the brunt of income losses from climate-related hazards.
Conflicts deepen poverty: The proportion of people living in extreme poverty in fragile and conflict-affected environments has risen sharply, and large segments of the population are regularly exposed to violence and instability.
The poorest countries are in sub-Saharan Africa
Sub-Saharan African countries are considered the poorest. Millions live in hunger and poverty in these countries, where their people are used as virtually free labour, where the West encourages war and conflict, and where their natural resources are exploited for their own wealth.
South Sudan, Yemen, Burundi, the Central African Republic, Malawi, Madagascar, Sudan, Mozambique, the Democratic Republic of Congo and Niger are the poorest countries according to the IMF.
Turkey stands out in terms of income inequality
Although Turkey falls into the low-middle-income country category, it leads the world in inequality according to the Gini coefficient, which measures income inequality. In Turkey, which ranks first in Europe in terms of inequality, the wealthy benefit from the increasing GDP. Sixty per cent of the population survives on an annual income below the per capita income.
Income and wealth distribution data in Turkey once again revealed the extent of inequality.
- The richest 20 per cent receive 48.1 percent of total income.
- The richest 1 per cent own 42.04 percent of total wealth.
- The richest 5 per cent control 59.2 percent of total wealth.
- The wealthiest 10% own 69.8 percent of total wealth.
- The poorest 20% earn only 6.3 percent of total income.
We have overtaken Argentina in inflation eroding purchasing power, leading the G20 and OECD
With September’s inflation, we have overtaken Argentina in inflation, rapidly eroding purchasing power, becoming the leader in inflation both within the G20 and the 38-member OECD.
As purchasing power shrinks due to high inflation, austerity policies have exacerbated poverty. Those forced into debt were further harmed by high interest rates. Meanwhile, high-income groups increased their wealth both through the profit environment created by the suppressed exchange rate and high interest rates, and through the operation of their money. Capitalists, who grew under the AKP government and were fed by public tenders and state incentives, only suffered ‘losses from profits’ during crises.
Luxury car sales break records
While being able to feed oneself has become a luxury for millions of households, luxury car sales are breaking records, the greatest indicator of income inequality. Between January and September, 5,013 ultra-luxury cars were sold. During the same period, luxury car sales reached 24,791 units. Approximately 30,000 luxury cars were sold in nine months.
In contrast, the eroding minimum wage covers only 24.3% of the current September poverty line. The coverage rate at the hunger line remains at 79%.
Half of Istanbul residents are struggling to make ends meet, with 40 per cent unable to pay their credit card bills
According to September 2025 data from the Istanbul Planning Agency (IPA), half of Istanbul residents are struggling to make ends meet, with 40 per cent unable to pay their credit card bills.
49.5% of participants expressed concern about not having enough food in their households. The proportion of those who said they ‘often felt anxious’ rose to 17.9%. The September 2025 edition of the Istanbul Barometer survey, published monthly by IPA, showed that household incomes are rapidly eroding, debt burdens are increasing, and economic despair is deepening.
According to the survey, 40% of participants could only pay the minimum amount on their credit card debt. The proportion of those able to pay off all their debts fell from 47.6 per cent to 40.6 per cent in one month. 11.3 per cent of participants in the lower income group reported that they were unable to make any payments. 53.9 per cent of participants said they were ‘struggling to make ends meet,’ while 31.4 per cent said they could no longer even meet their basic needs.
Sectors hit hard by the crisis turned to debt
According to the weekly bulletin published by the Banking Regulation and Supervision Agency (Bankacılık Düzenleme ve Denetleme Kurulu – BDDK), the amount of consumer loans reached 2 trillion 618 billion lira. Of this amount, 1 trillion 937 billion 622 million lira consisted of consumer loans. Individual credit card debts also reached 2 trillion 545 billion 669 million lira.
In the banking sector, non-performing loans rose by 4 billion 653 million lira compared to the previous week, reaching 508 billion 611 million lira as of 10 October. A special provision of 376 billion 201 million lira was set aside for non-performing loans.
173,000 people lost their jobs in the industry
Meanwhile, as the economic crisis deepens and the employment volume shrinks, unemployment is rapidly spreading. With 12 million 190 thousand people unemployed in the country, mass layoffs are becoming almost routine. Employment losses in industry are reported at 173 thousand, while in textiles they stand at 122 thousand.
Despite impoverishment, 3.6 trillion lira in taxes will not be collected due to reductions and exemptions
Despite all this impoverishment and the need to transfer revenues to strengthen this segment, there is a striking figure in the 2026 budget proposal submitted to Parliament. According to a report by Havva Gümüşkaya in Birgün newspaper, the government expects a deficit of 2 trillion 713 billion lira in the 2026 budget, but has announced that it will not collect 3 trillion 597 billion lira in taxes from this segment under the name of ‘tax reductions, exemptions and exceptions’.
Income tax accounted for 1 trillion 728 billion 924 million lira of the foregone taxes. This item also included the exemption of wages up to the minimum wage from taxation. Vice President Cevdet Yılmaz drew attention to this item, stating, ‘In 2026, we are contributing 1 trillion 92 billion lira to workers’ incomes.’
Corporate tax exemption: 768 billion lira
The corporate tax exemption provided solely to the business world amounts to 768 billion 68 million lira, VAT exemptions to 728 billion 590 million lira, excise tax exemptions to 91 billion 717 million lira, and other exemptions to 279 billion 805 million lira.
Budget expenditures for 2026 are projected at 18 trillion 929 billion lira, while budget revenues are projected at 16 trillion 216 billion lira. The budget deficit is targeted at 2 trillion 713 billion lira, with tax revenues projected at 15 trillion 631 billion lira.
“The 768 billion lira tax amnesty is equivalent to the annual pension of approximately 4 million retirees”
CHP Deputy Chair Gamze Taşcıer criticised the government’s tax policies and social security regulations.
Gamze Taşcıer said, “Instead of maintaining social security balance, the government is saving money at the expense of workers and increasing insecurity. By making it difficult for millions of citizens to access their pension rights, they will generate 200 billion lira in revenue for the system. Yet, it is the AKP government that is foregoing 3.5 trillion lira in tax revenue in the upcoming budget period. On the one hand, they are trying to squeeze every last drop out of a source equivalent to 1% of the 2026 budget, while on the other hand, they are forgiving more than 18 times the revenue they had targeted. The AKP government will grant companies 768 billion lira in tax amnesty next year. This is equivalent to the total annual salary of approximately 4 million pensioners. They have officially gifted this to employers,” he said.
“Taxes collected from citizens are being channelled back into interest, debt and the rentier economy”
CHP Kayseri MP Aşkın Genç, commenting on the 2026 budget, said, “In 2025, 18 out of every 100 lira in taxes went to interest, and the interest burden is not decreasing in 2026, but rather increasing,‘ he said, drawing attention to the decline in corporate tax and stating that ’the budget is not in favour of the people, but in favour of capital.‘
Genç said, ’But the figures tell a different story: in 2025, 18 out of every 100 lira of tax revenue went to interest payments. The 2026 budget says this burden will decrease, but the reality is quite the opposite. Interest payments will rise to 2 trillion 742 billion lira, meaning the interest burden is not decreasing; on the contrary, it is growing. The Treasury is transferring the taxes it collects from citizens back into interest, debt, and the rentier economy,” he said.
“Taxes paid by large companies decreased by 90 per cent in one year”
Noting that corporate tax decreased by 90 per cent compared to the same month last year, Genç said, “Another striking picture is in tax justice. Corporate tax collection, which was 171 billion lira in September 2024, fell to only 16 billion lira in September 2025. In other words, the tax paid by large companies decreased by 90% in one year. But they say they expect 1.6 trillion lira in revenue from this item for 2026. This is not unrealistic optimism, but blatant deception. While corporate tax decreased, income tax increased by 91%. In other words, the burden was shifted from companies to workers, civil servants, small traders and citizens. This picture shows that tax justice in Turkey has been completely undermined. Moreover, the 2026 budget continues with the same approach. Resources are again going to consumption instead of production, and to interest instead of investment,” he said.
Central Bank highlights rising inflation, cuts interest rate by 100 basis points
The Central Bank lowered the October policy interest rate to 39.5 per cent, in line with expectations. The Monetary Policy Committee (MPC) reduced the one-week repo auction interest rate, which is the policy interest rate, by 100 basis points to 39.5 per cent. The median of year-end policy interest rate expectations was 37.5 percent.
The MPC statement noted that recent data indicated a slowdown in the disinflation process. Stating that the underlying trend in inflation rose in September, the statement said, ‘Recent data indicate that demand conditions are at disinflationary levels, but that the disinflation process has slowed.’
The statement also noted that if the inflation outlook deviates significantly from the intermediate targets, the monetary policy stance will be tightened.
The MPC decision included the following statements:
“Risks to the disinflation process posed by recent price developments, particularly in food, through inflation expectations and pricing behaviour, have become apparent.
The Committee will determine the steps to be taken regarding the policy rate in a manner consistent with the intermediate targets, taking into account inflation outcomes, the main trend and expectations, and ensuring the tightness required for disinflation. The magnitude of the steps is being reviewed with an inflation outlook-focused, meeting-based and cautious approach. Should the inflation outlook deviate significantly from the intermediate targets, the monetary policy stance will be tightened.
Inflation front: Year-end forecasts, including Şimşek’s, are being raised
Treasury and Finance Minister Mehmet Şimşek said that inflation figures this year could be higher than expected. Speaking at the International Institute of Finance (IIF) Annual Member Meeting while in Washington to attend G20, IMF and World Bank meetings, Şimşek said, “We may see slightly higher figures than expected in our programme this year in terms of inflation, but I think we can cope with this. In general, I can say that all conditions are right for the disinflation process to continue.” Şimşek stated that they expect to close the year with an inflation rate of 30 per cent.
Meanwhile, investment bank JP Morgan raised its year-end inflation forecast for 2025 from 31.5 per cent to 32 per cent. The bank warned that political developments in Turkey pose an upside risk in terms of reference interest rates and price pressures.
The agricultural input index, which is the most important cause of food inflation, continues to rise. According to August data from the Turkish Statistical Institute (TÜİK), the agricultural input price index, one of the most important causes of food inflation, rose by 34.09 per cent annually and 1.30 per cent monthly.
TVF: We are the largest holding company; we can sell Vakıfbank
Arda Ermut, General Manager of the Turkey Wealth Fund (Türkiye Varlık Fonu – TVF), and Mahmut Kayacık, Deputy General Manager, met with economic journalists. Ermut stated that TVF ranks among the top 10 wealth funds in the world and that they are Turkey’s largest holding company with 34 companies, two licences, and 46 properties.
Responding to claims about the overseas sale of Vakıfbank, in which TVF holds a 73.3 per cent stake, Ermut said: “We have not yet had the opportunity to sell. The opportunity arose only when the right demand came for Vakıfbank. This was also misrepresented. When the demand came from a foreign investor, we evaluated it and sold our 1.53 per cent stake. There was serious demand. Whether there will be more depends on strategic considerations; when permission is granted, we would certainly like to evaluate it.‘
Ermut answered the question ’Will there be other sales?‘ as follows: ’We have the margin to take action when the right time comes. This could also be at Türk Telekom. We invested there, and now it’s time to reap the rewards. We have sales plans and public offering plans. There will be billion-dollar public offerings. We believe that transactions such as Vakıfbank will increase awareness.”
In 2026, an average of 42 billion 740 million lira in taxes will be collected per day
In 2026, 15.6 trillion lira in taxes will be collected. This will amount to an average of 42 billion 740 million lira per day. The majority of tax revenues will come from indirect taxes levied on supermarket shelves, bills, fuel, cigarettes, and automobiles. However, even this massive burden will not be enough to close the budget deficit; the Treasury will still face a deficit of trillions of lira.
Whilst every statement made by the economic management regarding taxation claims that indirect taxes will be reduced, the 2026 budget proposal reveals that the tax burden on the public will remain unchanged.
Excise tax revenues, which are projected to increase by 29.9 per cent compared to 2025, are expected to reach 2 trillion 549 billion 288 million lira in 2026.
Taxes on motor vehicles will constitute the largest share of excise tax revenues:
- Petroleum and Natural Gas Products: 662 billion 134 million
- Motor Vehicles: 959 billion 984 million
- Alcoholic Beverages: 191 billion 615 million
- Tobacco Products: 563 billion 2 million
- Carbonated Soft Drinks: 23 billion 546 million
- Durable Goods and Other Goods: 149 billion 4 million
Domestic VAT will be increased by 30.6 per cent compared to 2025, while import VAT will be increased by 25.6 per cent. In 2026, a total of over 5.6 trillion lira in VAT will be deducted from every purchase, invoice, and loaf of bread.
- VAT collected domestically: 3 trillion 539 billion TL
- VAT collected on imports: 2 trillion 96 billion TL
A 36-article omnibus bill proposal will make retirement even more difficult
The 36-article omnibus bill proposal submitted to the Grand National Assembly by AKP MPs contains tax, social security and fee regulations that closely concern large sections of society. According to the impact analysis, the proposal is expected to generate billions of lira in revenue for the budget. According to a report by Havva Gümüşkaya in Birgün, the new tax bill submitted to Parliament increases the contribution rate for SGK loans for military service, childbirth, doctorates, and master craftsman training from 32 per cent to 45 per cent.
Under the current law, for all types of loans taken out from the SGK, a premium of 32 per cent of the income determined by the individual is paid. Those who borrow based on the minimum wage pay a premium of 277.39 TL for one day of borrowing. The proposed law envisages increasing the premium rate applied to service borrowing from 32% to 45%. In this case, the daily borrowing premium based on the current minimum wage will increase to 390.08 TL.
With the new regulation, retirees will directly lose part of their already low income. According to the impact analysis, this measure aims to collect 2.9 billion TL in GSS contribution arrears.
Budget of 174.3 billion TL for the Presidency of Religious Affairs
In the 2026 budget proposal, the budget increase for executive ministries did not match that of the Presidency of Religious Affairs. The proposed budget for the Presidency of Religious Affairs for 2026 was 174 billion 389 million 341 thousand TL. Personnel expenditure constituted the majority of the Presidency’s 174.3 billion TL budget for 2026.
The Presidency of Religious Affairs also stood out in terms of the rate of increase in the budget allocations of public administrations within the general budget. With its budget increase rate for the 2025-2026 period, the Presidency surpassed 23 of the 41 general budget administrations. Despite a 34 per cent increase in the Presidency of Religious Affairs’ budget, the budget of the Ministry of Youth and Sports, which has struggled to resolve students’ accommodation issues, did not increase as expected. While a 34 per cent increase was projected for the Presidency’s budget, the increase in the Ministry of Youth and Sports’ budget remained at 29 per cent.
Request for additional pay rises for public employees and pensioners
Memur-Sen demanded additional raises for public employees and retirees during a protest held in front of the Grand National Assembly of Turkey. General President Ali Yalçın stated, ‘Budget discussions present an opportunity to increase the purchasing power of civil servants, restore wage balance in the public sector, and ensure labour peace. We want a flat-rate raise to be included in the budget that will also benefit retirees.’
Ali Yalçın, President of Memur-Sen, stated that the 2026 budget discussions to begin in the Turkish Grand National Assembly (TBMM) present an opportunity to increase the purchasing power of public sector employees, saying, ‘We want a flat-rate increase to be included in the budget that will also benefit pensioners.’
Minimum Wage Determination Commission holds its first meeting
The Tripartite Consultative Council, consisting of worker, employer and government representatives, held its first meeting on 21 October to discuss the functioning of the Minimum Wage Determination Commission. The Ministry of Labour and Social Security convened the Tripartite Consultative Council on 9 October with the agenda of ‘Promoting Trade Union Organisation’ and met to discuss the minimum wage.
At the meeting hosted by the Ministry, the parties exchanged views on the structure and functioning of the Minimum Wage Determination Commission ahead of the minimum wage negotiations to begin in December.
The minimum wage is currently applied as a gross monthly wage of 26,055.50 Turkish lira for a worker, which amounts to a net wage of 22,104.67 Turkish lira after deductions. The total cost of the minimum wage to the employer is 30,621 lira 48 kuruş per worker. Of this, 26,005 lira 50 kuruş is the gross minimum wage, 4,095 lira 87 kuruş is the social security contribution, and 520 lira 11 kuruş is the employer’s unemployment insurance fund contribution.
Gold rose rapidly, then fell just as quickly
Following a rapid rise, gold prices lost 3.3 per cent in value in a week due to profit-taking after signs that the trade war between the US and China would ease. The price of an ounce of gold fell to $4,112 on Friday morning, 24 October. Thus, after repeatedly reaching record highs, it ended its upward trend under intense selling pressure.
The metal recorded its biggest daily loss in five years, falling more than 5 per cent at the start of the week. On 21 October, the price of gold per ounce fell 5.3 per cent from $4,356 to $4,125. The price of gold had reached $4,375 per ounce.
The price of silver fell by 6.52 per cent to $48.4 per ounce.
Gram gold fell to 5,590 lira
There were also sharp declines in gold prices on the domestic market. After peaking at 40,650 lira, the Cumhuriyet gold coin fell to 38,500 lira on Friday morning, 24 October. Similarly, the quarter gold coin fell from 10,200 lira to 9,670 lira, and the gram gold coin fell from a peak of 5,910 lira to 5,590 lira.
The latest decline in gold coincided with significant outflows from gold-backed ETFs, which experienced their largest daily tonnage decline in the last five months. Nevertheless, gold has gained 55 per cent in value since the beginning of the year, supported by ongoing trade tensions as attention focuses on the trade talks between President Trump and Xi next week.
Geopolitical risks also persisted following the US imposition of new sanctions on Russia to pressure Moscow into a ceasefire in Ukraine.
Meanwhile, expectations that the US Federal Reserve (Fed) could make two more interest rate cuts by the end of the year continued to support bullion.
US financial giant withdraws gold recommendation
Following a nine-week rise in gold and silver prices, Citigroup withdrew its ‘overweight’ recommendation for gold, stating that positions were overextended. Experts note that the decline could be a technical correction, but that inflation and Fed expectations will remain supportive for precious metals.
US decision on Russia sends oil prices soaring
Oil prices rose amid growing supply concerns after the US added Russia’s two largest oil companies, Rosneft and Lukoil, and their affiliates to its sanctions list. As of the morning of 24 October, Brent crude oil rose 7.26 per cent for the week to $65.63 per barrel, while West Texas crude rose 6.97 per cent to $61.45 per barrel.
EU approves: sanctions on natural gas imports from Russia
European Union countries agreed on a 19th sanctions package, which includes a ban on imports of liquefied natural gas from Russia. Commenting on the package, European Commission President Ursula von der Leyen said, ‘For the first time, we are hitting the natural gas sector, which is the heart of Russia’s war economy.’
US banking crisis concerns hit global bank stocks
Announcements by US regional banks Zions Bancorp and Western Alliance that they had detected fraud in some loans triggered a sharp sell-off in global banking stocks.
Shares in JPMorgan Chase, one of the country’s major investment banks, fell by 2.3 per cent, while Jefferies Financial Group shares dropped by 10.6 per cent.
The VIX Index, known in the markets as the ‘fear index’ and which shows fluctuations in the S&P 500 Index, rose to 28.99 on 17 October, its highest level in approximately six months. However, it fell to 17.30 on Friday morning, 24 October, as the market calmed down.