Inflation in Turkey is continuing to rise.  The Central Bank of Turkey announced last month that prices rose by 1.27% in November, pushing annual inflation up by 0.45%, to 5.53% (year on year).  The biggest contributor to this was increasing food prices.  

On 4th January, they announced that inflation in December rose to 6.53% (year on year).  The largest contributory factor again was food.

And more is to come.  Analysts say that inflation is expected to rise again in January, by about 1.5%.  Fuel and electricity prices, plus food (again) are important factors in this rise.

In the midst of last year's economic storm, the Turkish government temporarily reduced taxes on a number of things, to stimulate the economy.  Now those tax breaks have come to an end, which will eventually mean more tax flowing into the coffers, but it also brings inflationary pressure.

Further, the government has decided to raise some taxes from the start of 2010.  For example, according to Todays Zaman, tax on unleaded petrol has increased from 1.69TL to 1.89TL per litre.  The tax on diesel and LPG in Turkey is less, increasing by 18 kuruş per litre.

(If you are wondering how that compares with the UK, the taxes levied on unleaded petrol equate to roughly 70 pence per litre - or 1.75TL, at a rate of 2.5).  

Other tax rises include cigarettes - up 5%, and the tax on beer is increasing from 26 kuruş to 35 kuruş per litre.  Milliyet newspaper reports that the price of wine is expected to increase by 15 - 20%.

So for some people, 2010 will bring a double whammy: lower interest income from their Turkish savings, compared to 2009 (although thankfully, rates have now stopped falling), and increased taxes and inflation.

Oh well.  It could be worse.  At least it's not snowing in Kalkan.