In recent months, the inflation rate in Turkey has been steadily rising and last month the annual inflation rate was around 50%. However, the central bank has not changed interest rates in its last two meetings and has instead tried to ensure the stability of the national currency by using other tools, such as injecting dollars into the market and buying lira.
There has been no major change in the value of the lira for some time, and Turkish President Recep Tayyip Erdogan has described the stability as a sign that the economy is entering a powerful period in Turkish history.
But the facts are disturbing. Erdogan is adamantly opposed to raising interest rates and has always promised the people that economic conditions will improve next year. The Turkish central bank has repeatedly cut interest rates due to Erdogan’s pressure, leading to a devaluation of the lira and rising inflation. The Turkish economy was already in big trouble, and in the last two years, the corona epidemic has added to the pressure.
Economists and opponents of the Turkish government have always stressed that non-orthodox monetary policies, such as lowering interest rates to curb inflation, are wrong and cause currency instability. But Erdogan has a different view. The Turkish government believes that inflation will gradually decrease as foreign exchange earnings increase, But forecasts suggest that inflation will be above 30% by the end of this year.
The persistence of high inflation has put severe pressure on the people, and if conditions do not change, Erdogan’s chances of winning the 2023 presidential election will be slim. The government has tried in various ways to reduce the impact of high inflation on people’s lives, But these measures are not effective enough.
The present articles refer to different aspects of the Turkish economy, different views on the economic horizon, the impact of the current situation on the people, and the development of the Turkish tourism sector.
