Income inequality deepens in Turkey: The rich get richer, the poor get poorer
An analysis published by The Economist reveals that income inequality in Turkey is steadily increasing. While luxury consumption is on the rise on one side, the purchasing power of low- and middle-income groups is eroding due to inflation on the other.
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The Economist, in its latest analysis on income inequality in Turkey, addressed the country's current economic situation and its social repercussions. The analysis highlights that luxury consumption in Turkey has reached its peak, while emphasizing the negative effects of inflation on the low- and middle-income classes.
In the Global Wealth Report published by the Swiss bank UBS, it was announced that Turkey was the country with the highest increase in wealth per capita worldwide between 2022 and 2023, with an increase of approximately 158 percent. However, the latest issue of The Economist states that this wealth increase has largely reflected on upper-income groups, while low- and middle-income segments are struggling with economic difficulties.
BOOM IN LUXURY CONSUMPTION
The analysis, titled "In Turkey, the rich get richer, the poor get poorer," discusses the rise in luxury consumption, citing examples such as the activity in shopping centers like İstinye Park, and the fact that Michelin-starred restaurants and marinas are overflowing.
It was emphasized that the number of ultra-rich individuals in Turkey increased by 10 percent between 2022 and 2023, and it was stated that this situation further deepens income inequality.
PURCHASING POWER IS ERODING
It was pointed out that while luxury consumption is booming on one hand, inflation is rapidly eroding the purchasing power of the low- and middle-income classes on the other. The 19 percent depreciation of the Turkish Lira against the dollar has led to a rapid increase in real estate prices in dollar terms.
The increase in spending, particularly in popular regions like Istanbul and Bodrum, has accelerated the growth of the wealth management sector serving Turkey's “new super-rich.” The volume of Turkish assets in this sector is expected to approach 123 billion dollars by the end of the year.