Prices in lira are rising, but in dollar terms — are falling.
Prices have skyrocketed in Turkey as the country is experiencing record inflation affecting locals and tourists alike. But at the same time, against the backdrop of a depreciation of the national currency, it becomes especially profitable for foreigners to rest in this country, reports the Chronicle.info with reference to RBC-Ukraine.
While the country has high hopes for a successful tourist season that will help strengthen the lira, local residents have begun to offer their homes in an attempt to earn a living.
What is happening with inflation in Turkey
In recent months, the prices of many goods in the country have increased significantly — in December, the fall of the lira forced grocery stores to reprice goods on the shelves almost every day. High prices and currency depreciation have hit household budgets hard.
The price of red meat, for example, has risen so much that many families can no longer afford it. Others buy it less frequently or in smaller quantities.
Local Montoya, a university student in Istanbul, said she decided to rent out her extra bedroom to tourists so she could pay her monthly rent .
«I get very upset when someone comes into this room — is to stay at home with someone I don't know. It's very scary, but there's nothing else I can do. Yesterday I went to the market and saw that one bag costs 300 lire. It was worth 150% a month ago,” she said.
In two weeks, Turkey's central bank will meet to discuss household relief strategies. Inflation in the country rose to 48.7% in January — after 36% in December.
But some economists believe the actual figures could be much higher.
«There are groups of scientists who have developed a technical measure of inflation. Their measurement was close to 60% in December. This creates a huge burden on society as a whole», — noted Durmus Yılmaz, former Governor of the Central Bank of Turkey (2006-2011).
How tourism is recovering in the country
While the economic situation is becoming increasingly difficult for those inside the country, the favorable exchange rate has made Turkey a more attractive holiday destination for people from other countries.
Tourism brought Turkey $34 billion in 2019 before the coronavirus pandemic. In 2021, this sector has recovered — the number of tourists jumped to 85%, although revenue was still a third lower than before the pandemic.
Tourist expert for group tours Sebnem Altyn  ;notes that there are reservations, but the recovery of such tourism is still fragile.
«Last season, people could just cancel their tours at the last minute, and the agencies were pretty flexible about that, which is something new. For this reason, although we have orders and everything looks very nice for the coming year, we cannot be sure that these orders will be realized», — she said.
Travel will help stop inflation — expert opinion
Tourism accounts for about 13% of the entire Turkish economy. According to the World Trade Organization, the country was the sixth most popular tourist destination in 2019.
Even then a favorable exchange rate was a key factor in attracting tourists.
According Roger Kelly, Lead Regional Economist at the European Bank for Reconstruction and Development, if the industry continues to recover with the easing of travel restrictions this year, it could bring wider economic benefits to Turkey.
The expert noted that one of the main structural problems of the economy is that the cost of goods and services imported by Turkey exceeds the value of exports.
According to him, an increase in tourism revenue will help reduce this gap and strengthen lyre. A low lira is fueling inflation.
«Therefore, a strong tourist season will help support the lira and reduce inflation», — Kelly explained.
«For $100 you can fully dress your child for school»
Many tourists combine sightseeing tours to Turkey with shopping for branded items. Tour selection specialist Marina Kazakova explained in a comment to RBC-Ukraine the reasons why shopping in this country is attractive for tourists.
«Turkey has always been a great place for shopping, buying things. There are two factors here. First — there are a large number of factories in Turkey that produce many European brands, and the Turks themselves are very proud of this»,— she says.
Turkey has inexpensive fabrics at wholesale prices and labor, so prices for finished goods are already the lowest in Europe compared to other countries. In addition, the price of clothing does not include additional transport, customs and other costs.
The second factor, according to her words, — after the fall of the lira, clothes became cheaper compared to last year.
«Now my tourists are in Istanbul. Yesterday they went shopping and said that they bought 50-60 percent more things than they bought in Kiev for the same money.
It is clear if it is not profitable to fly to Istanbul for a small purchase. But if you take a boutique of class branded clothes, then for 100 dollars you can fully dress a child for school, and in Ukraine for such an amount it is unlikely», — notes the specialist.