Turks wait in line for cheap bread as inflation eats into earnings - Reuters

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• Lira has lost 45% of its value against dollar this year
• Municipal agency says cost of living up 50% in a year
• Istanbul mayor says economic woes are a government failure
• Erdogan says addressing economic problems faced by people

ISTANBUL, Dec 8 (Reuters) - As the lira's plunge in value and surging inflation erode Turks' earnings, many people in Istanbul have taken to waiting in line for the municipality's cheap bread as they scrimp to make small savings in their household budgets.

In the city's Sultangazi district, a traditional stronghold for President Tayyip Erdogan's AK Party, dozens waited to buy bread at a kiosk run by the municipality, saying growing economic woes left them no choice.

"The people now are in such a tight spot that we count every one, five, 10, 20 lira," said Ozcan Kethuda, 50, after buying bread for his family.

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He blamed the government for the hardship.

"The government must change because for 20 years there has been the same system," he said. "Most people here may say ‘long live my sultan’, but that period is over. Those who, together with me, voted for the AK Party are also facing difficulties."

Ramazan Kambay said his family's economic situation had worsened sharply. They used to get by on 1,000 lira a week, half going on food. With the collapse in the lira, that is now worth just $73 - no longer sufficient for their needs.

"If you get 1,000 a week it's not enough," he said. "Who are we supposed to blame for this?"

For Istanbul Mayor Ekrem Imamoglu, seen as a potential challenger to President Tayyip Erdogan, the queues illustrate what he says is not just an economic crisis but a failure of government, showing the need for political change.

His municipality sells bread at 1.25 lira (9 U.S. cents) or around half the price in regular bakeries, and has almost doubled bread output to some 1.5 million loaves a day to meet demand. But he said the queues indicated this was not enough.

"This shows very clearly the poverty. People don't get pleasure out of queuing to buy bread," he told Reuters in an interview at his offices in central Istanbul.

In November alone, the lira lost some 30% of its value, while official annual inflation jumped to 21.3%, after the central bank slashed its policy interest rate to 15% from 19% since September under pressure from Erdogan. read more

According to a municipality agency, the cost of living has surged 50% in a year, with rents rising 71% and many basic household goods' prices leaping between 75% to 138%.

"This current process is not merely an economic crisis. I want to underline that it is a political crisis," Imamoglu said.

ECONOMIC ATTACK

Opinion polls show Erdogan's approval rating has hit a six-year low and that he may lose to potential presidential rivals. Imamoglu, who took office in 2019 after defeating the AKP candidate, has been touted as a challenger, but he says his only focus is on doing his job as mayor.

Erdogan says the government is addressing difficulties faced by ordinary Turks as it pushes through a new growth-focused economic policy focused on exports, production and investment.

"We are taking steps to solve the problems which our people are facing in their daily lives." he said in a speech in the southeastern province of Siirt on Saturday, saying wage hikes would lighten the burden for poorer people.

He blamed "greedy opportunists" for recent "extortionate" price rises, saying the government was being attacked through the economy for the last three years, but that "our nation understands and supports us."

Among those buying bread in Sultangazi, housewife Emine Sari Mehmet said the government needed solidarity from the people in the face of forces undermining the economy.

"This is a game set up against our state. That is what I think," Mehmet said. The solution, she said, was "to support our state. This state is ours."

($1 = 13.6701 liras)

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Additional reporting by Can Sezer and Bulent Usta, Writing by Daren Butler Editing by Angus MacSwan

Our Standards: The Thomson Reuters Trust Principles.

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