Turks are facing price hikes at the beginning of 2022

Inflation soared by the most in at least a decade in Turkey's biggest city Istanbul last month, according to data on Saturday, as the government sharply raised nationwide electricity and natural gas prices for the new year.

Prices also jumped for petrol, car insurance and some bridge tolls, adding more strain to an economy facing surging inflation and a currency crisis that was triggered by a series of unorthodox interest rate cuts.

The Energy Market Regulatory Authority, citing high global energy inflation, said electricity prices were raised by as much as 125% for high-demand commercial users and by around 50% for lower-demand households for 2022.

Natural gas prices jumped 25% for residential use and 50% for industrial use in January, national distributor BOTAS said. The price rise was 15% for power generators.

In Istanbul, home to around a fifth of Turkey's population of 84 million, retail prices jumped 9.65% month on month in December for an annual rise of 34.18%, the Istanbul Chamber of Commerce (ITO) said. Home appliance prices were up more than 20% while food rose nearly 15%.

Wholesale prices in the city jumped 11.96% from November for an annual rise of 47.10%, ITO said. The higher costs, announced shortly before midnight on New Year's Eve, will also extend to higher prices for petrol, bridge tolls and car insurance.

According to Turkey's Energy Market Regulatory Authority, electricity costs will rise 50% for households in 2022 and 125% for businesses. The government agency blamed higher global energy prices.

Durmus Yilmaz, a former central bank governor, wrote on Twitter the government condemned Turkish people to "deep poverty" and warned of "major social problems."

In a New Year tweet, opposition leader Kemal Kilicdaroglu of the Republican People's Party (CHP) said the government was going to "shove colossal hikes down people's throats as they enter the new year."

The value of the Turkish lira suffered dramatic drops in 2021 as the country followed an unorthodox economic policy that emphasized low interest rates at the expense of all else. As a consequence, the lira suffered a 45% loss of value over the last year.