Levent Gürses
According to data released by the Turkish Statistical Institute (TÜİK), inflation rose by 2.06% in July, bringing annual inflation to 33.52%. Thus, the increase in consumer prices was 19.08% compared to December last year and 41.13% compared to the 12-month average. In July, the highest price increase was 26.41% in natural gas and related subscription fees.
The Inflation Research Group (Enflasyon Araştırma Grubu – ENAG) calculated the monthly increase at 3.75% and the annual inflation rate at 65.15%, while the Istanbul Chamber of Commerce (İTO) reported an annual inflation rate of 42.48% for Istanbul. Using almost the same basket as the Turkish Statistical Institute (TÜİK), İTO calculated price increases to be 9 percentage points higher than the official inflation rate.
With the announcement of inflation figures, the maximum rate for rent increases in August has been determined. The maximum rent increase for August was 41.13%.
Hold on for three more years, message
Finance Minister Mehmet Şimşek stated that inflation will reach single digits by 2027 and urged workers to hold on for three more years. Şimşek listed oil prices, additional customs duties, and unprocessed food prices as factors posing ‘limited upward risks,’ adding, ‘We will take the necessary steps to prevent any disruption in the disinflation process in the face of potential shocks.’
Şimşek conveyed the message that there would be no compromise on the austerity programme and argued that inflation targets would be achieved through the ‘coordination of monetary, fiscal, revenue and supply-side policies.’
Cost of living in Istanbul reaches a record high
According to the Istanbul Planning Agency (IPA), the cost of living for a family of four has risen to 96,559 Turkish lira. According to the IPA, the cost of living in Istanbul in July increased by 45.15 per cent compared to the same month last year. The IPA’s cost increase was found to be close to the Istanbul Chamber of Commerce’s (İTO) 42.48 per cent increase.
The cost of living in Istanbul increased by 3.35% compared to the previous month. Thus, the average cost of living in Istanbul increased by 3,134 lira in one month. In a household with two adults earning the minimum wage, income covers only 44% of the cost of living in Istanbul. The cost of living for a family of four in Istanbul was 87,453 Turkish Lira in March of this year.
Inflation and taxes have caused workers to lose a total of 972 bn TL in just 7 months
A study conducted by the Confederation of Progressive Trade Unions Research Centre (DİSK Araştırma Merkezi / DİSK-AR) revealed the losses experienced by workers in the first seven months of the year. According to the Wage Loss Monitoring Report published by DİSK-AR, inflation and taxes caused a total loss of 972 billion TL from workers’ wages over the seven months. The study noted that the rising inflation and tax burden created a transfer of income and stated the following:
One of the main reasons for the decline in wages is the rapidly increasing tax burden. For example, a worker with a gross salary of 47,750 TL paid less than 3,000 TL in taxes in January 2025, but by July, this amount had risen to nearly 5,000 TL. The total amount of taxes and deductions, which was 10,100 TL in January 2025, increased to 12,129 TL in July 2025. The loss in average worker wages due to inflation in January 2025 was 1,894 TL, while this amount rose to 6,796 TL in the July 2025 period. The erosion caused by taxes and inflation in January was 4,831 TL, while this amount rose to 11,793 TL in July. The cumulative erosion of the average worker’s wage over seven months reached 58,450 TL.
The government spends 0.41% of GDP on R&D
According to calculations made using central government budget data, spending on R&D activities in 2024 amounted to 178 billion 580 million TL. The proportion of this expenditure within the central government budget was calculated as 1.51%, while its proportion within the Gross Domestic Product (GDP) was 0.41%. Based on estimates using the initial budget allocations for 2025, 236 billion 262 million TL was allocated from the central government budget for R&D activities.
TOGG can be purchased in Germany in 17 months and Turkey in 107 months of work
The TOGG produced in Turkey is sold for 2,363,000 Turkish Lira in Turkey, while it is available for 1,662,000 Turkish Lira in Germany. While a minimum wage earner in Germany can purchase a TOGG in 17 months, someone in Turkey would need to save their entire salary for 107 months to afford one. According to a report by Birgün, CHP MP and member of the Turkish Grand National Assembly’s Planning and Budget Committee, Ahmet Vehbi Bakırlıoğlu, stated, ‘The fact that a car described as “domestic and national” is so inaccessible to citizens in the country where it is produced highlights the class-based injustice of tax policies.’
Trump imposes a 15% tariff on Turkey
US President Donald Trump has changed customs duty rates for certain countries; the new rates range from 10% to 41%. According to the decree, a 15% customs duty will be imposed on Turkey. The tariff rates in question will come into effect seven days after the decree is published. Under this decree, tariffs of 25 per cent on India, 19 per cent on Indonesia, 35 per cent on Iraq, 15 per cent on Israel, 19 per cent on Malaysia, 15 per cent on Norway, 39 per cent on Switzerland, 41 per cent on Syria, 20 per cent on Taiwan and 20 per cent on Vietnam are planned. The tariff rate for Canada has also been increased from 25% to 35%.
Record increase in global gold demand
Global gold demand rose by 3% year-on-year to 1,249 tonnes in the second quarter of the year. According to the World Gold Council’s (WGC) Gold Demand Trends report for the second quarter of the year, strong investment flows, rising geopolitical uncertainties and price momentum supported demand, causing the value of global gold demand to increase by 45% year-on-year to a record high of 132 billion dollars in the second quarter. During this period, gold investments also grew by 78% year-on-year.
Europe is shifting its energy focus to the US
US President Donald Trump announced that the European Union (EU) and the US have signed a large-scale trade agreement covering energy exports and investments, including the purchase of $750 billion worth of energy products and a $600 billion investment commitment to the US. While continuing its policy of distancing itself from Russia in the energy sector, the EU is shifting its focus towards the US. The EU, which currently imports approximately 90-100 billion dollars worth of US-origin energy products annually, is expected to increase its imports to an average of 250 billion dollars per year over the next three years. This would represent a nearly 2.5-fold increase in annual energy imports.