‘Prices set to rise’,

THE prices of everyday goods and services in North Cyprus are set to rise further, economists warned this week.

Prices have gone up by an average of 3.84 per cent since the start of the year, according to the head of the Statistical Institute, Türel Öksüzoğlu. She said that year-on-year inflation in April stood at 16.45 per cent.

In comments to Cyprus Today’s sister newspaper Kıbrıs, Cyprus Turkish Chamber of Commerce president Turgay Deniz said that the price hikes, combined with a controversial freeze on the cost of living allowance for public sector workers, have had a negative impact on the country’s economy.

“When the government decided to stop the cost of living allowance, it announced that it would be paid back in the future and that this resource would also support the real sector. However, no support package has been announced so far and this resource was not given to the real sector.

“This month [May], the Council of Ministers authorised borrowing of up to 200 million TL in order to pay salaries. Therefore, the economic wheels are not turning properly.”

Cyprus Turkish Chamber of Artisans and Shopkeepers chairman Mahmut Kanber said:

“The low-income population is particularly affected by this. . . You cannot buy milk for the same money [as before]. This is a very troublesome situation and unacceptable.

“In order to revive the economy, the land border gates should be opened quickly, [university] students should be able to enter the country as soon as possible, and methods to increase tourism should be determined and people’s earnings should rise.

“The effect of these price hikes can only be reduced by increasing people’s earnings.”

Prof Dr Fehiman Eminer, of European University of Lefke’s Faculty of Economics and Administrative Sciences, said there is a shortage of “resources”.

“We’ve been saying this for years. However, it is very visible at the moment and felt by society. The state and government have difficulties in finding resources and borrowing is constantly on the table.

“We are going through difficult times and our purchasing power may decrease as it has in many countries. . . We also have to make some sacrifices. However, the problem is whether or not suitable resources are used correctly.”

Noting that the cost of living allowance salary freeze has had a knock-on effect for the private sector, Prof Eminer continued: “The salaries [in the private sector] are already a problem, employment is already a problem, and if there is such trouble even in the public sector, the [purchasing] power of the private sector employee weakens even more.

“Therefore, it is a very dire situation. We need to see that they [ministers] are working on a plan to get the economy back on its feet. If we are to understand why some payments are cut today, we need to know why we are making this sacrifice.”

Prof Dr Hasan Rüstemoğlu, of Cyprus International University’s Economics and Administrative Sciences Faculty, said that clothing and footwear prices had gone up the most in the latest inflation figures, followed by the transport, education, restaurant and hotel sectors.

“Sustainable annual inflation is accepted as two to three percent,” he said.

“In this context, the TRNC economy’s annual inflation unfortunately exceeds the sustainable value at 16.45 percent. . . Along with the pandemic, the issue of inflation has been combined with unemployment.”