‘Sacred Duty’: Inflation Eats Into Turkey’s Muslim Feast

Turks who make a living raising animals and selling them on open markets fear their business model may soon collapse Yasin AKGUL AFP
Turks who make a living raising animals and selling them on open markets fear their business model may soon collapse Yasin AKGUL AFP
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‘Sacred Duty’: Inflation Eats Into Turkey’s Muslim Feast

Turks who make a living raising animals and selling them on open markets fear their business model may soon collapse Yasin AKGUL AFP
Turks who make a living raising animals and selling them on open markets fear their business model may soon collapse Yasin AKGUL AFP

With inflation in Turkey galloping, the sheep Gul Er buys every year for the Muslim festival of sacrifice in Istanbul looks agonizingly out of reach.

Prices have doubled or even tripled since President Recep Tayyip Erdogan began an unorthodox economic experiment last year that has seen Turks' living standards suffer.

The young mother hopes to bargain down the price on one of the skimpiest-looking animals at a livestock fair held under white tents in a conservative corner of the city before the Kurban Bayrami (Eid al-Adha in Arabic) holiday.

"It is a sacred duty," she said of buying a sheep, which along with oxen and goats are sacrificed in the name of Allah, with the meat traditionally shared with the poor, friends and neighbors.

"But this year, prices are unaffordable," Er said, the stench of thousands of animals mixing with the sounds of haggling in the heavy summer air, ahead of Saturday's first full day of festivities.

According to AFP, annual inflation in Turkey has officially reached 78.6 percent, although economists and many ordinary Turks doubt government data.

Even if the official figures are to be believed, that is higher than in any other emerging market and nearly 10 times the record levels rocking the European Union, where the cost of living is unleashing political crises.

An independent survey prepared by the ENAG group -- and believed by most Turks -- puts the annual inflation rate at 175 percent.

Besides clouding Erdogan's chances in next year's election, these figures spell trouble for the merchants at the Istanbul animal fair.

Turkey's agricultural chambers union chief Semsi Bayraktar expects sales to fall by a quarter this year.

Galip Toklu, a breeder who came to the 40,000-square-metre (10-acre) fair from the Black Sea city of Samsun, listed the ways inflation snowballs into seemingly endless problems.

The cost of animal feed has quadrupled while the amount he pays to drive his livestock to Istanbul has tripled since the last Kurban Bayrami, forcing Toklu to double the price of his meat.

"Last year, I sold 500 kilos (1,100 pounds) of beef for 20,000 liras. This year, I set my prices at 45,000 liras," he said.

Yet few can now afford Toklu's beef, while selling it any cheaper could put him out of business.

"Customers are unavoidably upset," he said, his face sullen under a wide-brimmed hat.

While this year's animal fair looks huge, its 160 tents are a fraction of the 500 erected in past years.

As the fair winds down, breeder Sinas Ates looks despondent, having failed to make a single sale in two days. Livestock farming in Turkey is "finished", he grumbled.

Just like the sacrifice of sheep, Erdogan's economic experiment -- dubbed "Erdonomics" by skeptical global markets -- is also linked to his faith.

Erdogan cites Islamic proscriptions on usury to justify his refusal to raise interest rates to fight inflation.

High interest rates cause prices to rise, according to Erdogan's logic, which contradicts accepted economic orthodoxy.

So Erdogan has pushed the central bank to set interest rates even lower. Analysts at Capital Economics in London see the possibility of a crash of the lira as "a major risk".

At the market, Salih Yeter has responded to the crisis by coming out to look for the perfect sheep with seven friends, who will all contribute to the purchase.

"People usually can't afford to eat meat," the 57-year-old said, adding that giving away meat to the poor is particularly important in times of trouble.

The price of food has soared by 93 percent in the past year, according to official data, with meat prices pushing even higher.

This is especially painful for Er, whose daughter has a metabolic condition that restricts her to a meat diet.

"I can't even respect my daughter's diet," the mother whispered.

But respect for the holy holiday's traditions is binding, said Selahattin Kose, a "hajji" (one who has made the pilgrimage to Makkah), from the eastern city of Erzurum.

"Prices have doubled, but we have to deal with it," Kose said. "It's Allah's orders."



IMF Praises Saudi Arabia’s Unprecedented Economic Transformation

Efforts to diversify the economy have started to bear fruit: IMF (Asharq Al-Awsat)
Efforts to diversify the economy have started to bear fruit: IMF (Asharq Al-Awsat)
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IMF Praises Saudi Arabia’s Unprecedented Economic Transformation

Efforts to diversify the economy have started to bear fruit: IMF (Asharq Al-Awsat)
Efforts to diversify the economy have started to bear fruit: IMF (Asharq Al-Awsat)

The International Monetary Fund (IMF) has praised Saudi Arabia’s significant economic changes under the “Vision 2030” national transformation plan, noting improvements in public finances and business regulations.
An IMF mission expected non-oil growth in Saudi Arabia to reach around 3.5% in 2024, crediting careful economic policies and major reforms.
The mission also highlighted record-low unemployment rates and controlled inflation in the country, and welcomed recent updates to funding requirements aligned with “Vision 2030” goals.
The IMF released a concluding statement at the end of its official staff visit to Saudi Arabia.
In the statement, the IMF said: “Saudi Arabia’s unprecedented economic transformation is progressing well.”
“Prudent macroeconomic policies, transformative changes—including through fiscal reforms and in the regulatory business environment—and strong domestic demand have helped prop up non-oil growth. Inflation remains contained.”
“Spending reprioritization and recalibration of major spending programs are ongoing. Efforts to diversify the economy have started to bear fruit.”
“Building on these successes, it will be important to sustain the non-oil growth momentum, maintain financial sector stability, continue mitigating risks of overheating, reverse declining total factor productivity and ensure inter-generational equity.”
Economic Activity Remains Robust
According to the IMF, real non-oil growth decelerated from 5.3% in 2022 to a still robust 3.8% in 2023, driven mostly by private consumption and non-oil investment.
While non-oil growth for Q1-2024 indicates some moderation in economic activity— the IMF staff estimated that the output gap remains in positive territory, close to 2% of the non-oil potential GDP.
The statement also noted that the Saudi economy weathered the geopolitical tensions in the Middle East well, thanks to minimal trade and financial exposures to the affected regions and uninterrupted shipments.
Unemployment Rate Reached Historic Lows
In 2023, the Saudi economy added over one million jobs, primarily in the private sector. The overall unemployment rate for Saudis dropped to 7.7% in the last quarter of 2023—inching closer to the 2030 Vision objective of 7%.
Labor force participation rates have remained at historically high levels but relatively flat over the past year for both men and women, albeit with the women’s rate still comfortably exceeding the Vision 2030 goal of 30%.
Headline Inflation Has Decelerated Rapidly
After peaking at 3.4% in January 2023, year-on-year inflation receded to 1.6% in April 2024, helped by an appreciating nominal effective exchange rate.
However, rents are growing at a brisk rate of about 10% amid inflows of expatriate workers and large redevelopment plans in Riyadh and Jeddah.
Wholesale prices have also edged up recently, reflecting an increase in input costs. So far, some uptick has been observed in the wages of high-skilled workers.
Additionally, the current account surplus narrowed significantly.
The decline in the current account surplus from 13.7% of GDP in 2022 to 3.2% of GDP in 2023 mainly reflected lower oil exports and strong growth in investment-related imports.
These were partly mitigated by a record surplus in the services balance, including a 38 percent surge in net tourism income.
The Saudi Central Bank’s (SAMA) holding of net foreign assets reached $423.7 billion in April 2024, which was slightly above the end-2023 level.
Reserves remain ample, representing 15.6 months of imports and 208% of the IMF’s reserve adequacy metric by end-2023.