We wrap up our 2006 Turkish cost of living series by asking the question – ‘Is Turkey getting more expensive?’
Over the last few weeks we have reviewed a wide range of costs as part of our 2006 Turkish cost of living update. It has become very clear that for most things Turkey is half the price or more than the UK with only cars, fuel and a few luxury food items coming out as more expensive.
So why are almost 70% of our readers saying it’s now more expensive?
Well, it depends on your personal financial circumstances, how you manage your money and how you read the question.
On the face of it Turkey is getting more expensive. Prices are claimed by the Government to be rising by around 10% this year. It was this news of double digit inflation that led in part to the dramatic devaluation of the Lira last month. But Turkey is not alone in some of the price increases that are way above this figure. Petrol, gas, oil, rubber and some other costs are rising way above 10% globally as demand and the international markets drive prices higher.
But, depending on your personal financial situation you may have actually seen your cost of living reduce.
For those of you drawing a UK pension you now get around 20% more Lira to the Pound than you would have in February this year. If you were canny, had some cash and converted some Pounds to Lira at the end of June you could have got up to 40% more when the rate peaked at 3.19 Lira to the Pound!
But those of you who hold your cash in the Turkish Lira will have also have received a financial boost as gross interest rates have increased to 18% from around 15% a few months ago. Even after tax, you will be getting 4% – 5% above base inflation.
So, is it getting more expensive? Yes, prices are rising, but the effect of the exchange rate and interest rates on Turkish deposit accounts can offset all of this and more depending on how you manage your money.