Recep Tayyip Erdoğan has said his government will cut energy bills for consumers and companies in the Turkish president’s latest attempt to ease the cost of living crisis weeks before a hotly contested election.
Residential and business electricity rates will be cut by 15 per cent next month, while industrial groups will receive a 20 per cent discount on their natural gas bills, Erdoğan said in parliament on Wednesday.
The fresh wave of stimulus measures comes as Turkey’s population faces a squeeze from severe inflation that has caused the price of everything from groceries to housing to soar. Erdoğan’s unconventional economic policies have inflamed the inflation crisis and weakened the country’s currency, which has weighed heavily on the president’s popularity.
Erdoğan is set to face his toughest election during his two decades in power on May 14. Several of Turkey’s leading opposition parties earlier this month chose Kemal Kılıçdaroğlu as a common candidate to battle Erdoğan.
The state of Turkey’s $900bn economy and the government’s sometimes stuttering response to the February 6 earthquake, which killed more than 50,000 people in Turkey, are expected to dominate the election campaign in its final weeks.
Consumer prices were up 55 per cent in February compared with the same month in 2022, while the domestic producer price index was up 77 per cent over the same period, according to official data.
Erdoğan, who is a longtime opponent of high borrowing costs, pushed the central bank to slash interest rates last year in contrast to most countries, which boosted them to combat inflation.
The lira has tumbled 62 per cent against the US dollar since the start of 2021, as many foreign investors have fled the country over concerns about its economic trajectory.
The Erdoğan government has attempted to dull the blow from runaway inflation with a series of measures, including a 55 per cent rise in the minimum wage at the start of this year and increases to pensions for public servants. It has also attempted to shore up the lira with the introduction of bank accounts that protect against exchange rate fluctuations and tight controls on the movement of foreign currency by companies.
While Erdoğan’s appeal has been wounded by the economic malaise, he remains popular in many constituencies, particularly in the more pious parts of society that he has championed during his time in power. He has also received a boost on the international stage since early 2022 for acting as a mediator between Russia and the west.
His pushback against Sweden’s bid to join Nato over claims that it had harboured individuals Turkey considers to be terrorists also gained Erdoğan favour among some groups. In contrast, he has vowed to allow Finland’s accession to the western military alliance, with the Turkish parliament expected to ratify the move as soon as this Thursday.
Kılıçdaroğlu’s opposition coalition, which is composed of six parties, has promised to return Turkey to a more orthodox economic model if it wins the election. The so-called table of six has also pledged to bring Turkey back into a parliamentary democracy after Erdoğan won a referendum to concentrate power within the presidency in the wake of the 2016 coup attempt.
The table of six received a boost last week when the pro-Kurdish People’s Democratic party, the country’s third-biggest political group, said it would not field its own candidate.