The price of a King Chicken menu at a Burger King restaurant in Turkey jumped by 3,233% from 2016 to July 2025, according to local business daily Ekonomi.

The eyewatering inflation brought the cost to Turkish lira (TRY) 265 ($7) from TRY 7.95 nine years ago. At the discount price in 2016, the menu was even on sale for six lira.

The USD/TRY pair rose by 1,041% to 40.2 by July 16 from the 3.5 recorded at end-2016.

Minimum wage bought 168 menus. Today it buys 83

The prevailing minimum wage of TRY 1,301 in 2016 could secure the wage earner 168 King Chicken menus at the undiscounted price of TRY 7.95. Today’s minimum wage of TRY 22,105 is enough to pay for 83 such meals.

For 2025, Turkey hiked its net minimum wage by 30%. The wage was equal to $627 when announced in December. By May 26, depreciation of the lira brought its value down to $567. As of July 16, it was worth $549.

Turkey’s hunger threshold, representing the required minimum monthly food expenditure for a four-person family, was up 38% y/y in June to TRY 26,115, according to a monthly survey conducted by yellow labour union Turk-Is.

The poverty threshold for a four-person household, meanwhile, stood at TRY 85,066 per month. The minimum cost of living for a single person was TRY 33,587.

Gasoline and milk

Looking at the price of gasoline in Turkey, as of July 16, it stood at TRY 51.27 per litre at Opet stations located on Istanbul’s European side, some 892% higher than the TRY 5.17 price that applied at end-2016. Over the same time period, the diesel price rose by 1,071% to TRY 53.61 from TRY 4.58.

The price of one litre of milk, meanwhile, is set to rise to TRY 18.35 as of August 1. That is 1,496% up on the TRY 1.15 paid in 2016.

Official inflation 35% y/y

Turkey’s official consumer price index (CPI) rose by 971% to 3,132 points in June from 293 points at end-2016.

Official annual inflation stood at 8% on average between 2006 and 2015. It then rose to 9% in 2016, 20% in 2018, 36% in 2021, 64% in 2022 and 65% in 2023.

On July 3, the Turkish Statistical Institute (TUIK, or TurkStat) said that Turkey’s inflation officially stood at 35.05% y/y in June versus 35.41% y/y in May and 44% y/y at end-2024.

The Istanbul-based ENAG inflation research group of economists presents very different findings. It calculated an inflation figure of 69% for June, following its assessment of 71% for May.

It is not advisable to plan, price or draw inferences based on TUIK data. There is widespread concern about the reliability of Turkey’s official data series.`

Chart by daily Ekonomi: Turkey’s current “orthodox” economic management team took the wheel in June 2025 and prompted sharp increases in the official inflation series as presented by TUIK. However, the gap between the TUIK figures and the Istanbul Chamber of Commerce (ITO) figures has been widening again lately.

Inflation “target” unchanged

On May 22, the central bank left its end-2025 official inflation “target” unchanged at 24% y/y in its latest quarterly inflation report. The upper boundary of the forecast range was also kept unchanged by the authority at 29%.

On July 10, the central bank said in a blog post that a $10 increase in the average Brent oil price, seen following price hikes that followed Israel’s attack on Iran last month, would add 1.2 percentage points to Turkey’s end-2025 inflation and $1.25bn to the 2025 current account deficit.

On August 14, the regulator will release its next inflation report and updated forecasts.

Rate cut hopes for July 24

Local bankers and real sector representatives are calling for a 350bp policy rate cut at the next monetary policy committee (MPC) meeting, scheduled for July 24. The finance industry is indicating it would be okay with a more limited cut.

Central bank officials have been moving to curb demands for an aggressive rate-cutting cycle with blog posts (as referred to above) and commentaries given in closed-door meetings (as referred to below).

On June 19, the MPC left its main policy rate (one-week repo) and overnight lending rate unchanged at 46% and 49%, respectively. It pointed to the Israel-Iran war that was ongoing at the time.

Markets calm

As the ceasefire held in the Israel-Iran conflict, the markets entered into a calm period. In recent weeks, portfolio flows into Turkey turned slightly positive and the country’s central bank reserves showed a moderate gain. Also, debt inflows have been strengthening.

The USD/TRY pair level is now in the 40s. The smooth nominal devaluation and real lira appreciation policy remains on track. The annual rise in the exchange rate remains in the 22%s, well below the inflation “target”.

Some players who see no difference between an increase from one to two and an increase from 39 to 40 circulate the idea that it is time to short lira. Perhaps this is not a good strategy at current interest rate levels.

Budget deficit remains high, lira investors must share profits

On July 9, there was an interesting move from finance minister Mehmet Simsek. He hiked the tax on lira deposits from 15% to 17.5% for maturities up to six months. Lira deposit maturities are mainly up to three months in Turkey.

As of July 4, the weighted average lira deposit rate for maturities up to three months stood at 58%. It is below “ENAG” inflation but offers big returns versus “TUIK” inflation and the USD/TRY.

In May 2024, when Simsek held a press conference to address the finance industry’s calls for a contribution from fiscal policy to the monetary tightening process, bne IntelliNews noted: “The Erdogan regime is, however, not in a position to cut its spending.”

Grumbling, London meeting

With grumbling evident from lira investors, Bloomberg reported that central bank governor Fatih Karahan told investors during a closed-door meeting in London that deposit choices were being followed.

Last weekend, Simsek was in meetings with ruling Justice and Development Party (AKP) officials during a party event. Media reports suggested he was coming under attack.

On July 16, the finance ministry said Simsek was not personally expecting a rate cut on July 24, but was simply discussing market expectations.