Turkey.. How did Erdogan cause the worst economic crisis in the history of the Turks?
The Turkish economy is going through one of the worst periods in its history, as Turks are facing a staggering rise in prices in one of the hot inflation areas in the world. Only Turkey is experiencing a change in the prices of consumer goods that are durable day after day, because it depends on the exchange rate. For example, the change in the prices of petroleum products has a daily impact on the consumer price index because it affects consumers directly and indirectly.
The Telegraph, a British newspaper, asserted that Turks are stuck in Recep Tayyip Erdogan’s volatile world where official statistics have lost credibility, and religion drives central bank policy. Everyone in the government is responsible for the highest inflation rate in decades. The official inflation measure indicates that prices have risen to the highest level in 24 years at 78.6% and food costs have nearly doubled in the past 12 months. The ENAG Group of Independent Economists, however, believes that the situation in Turkey is worse, confirming that the inflation rate in Turkey reached 175% in June, which is much higher than the official figure now discredited by foreign investors. Even multinational giant companies are struggling to keep up with the pace of price changes, as the smart company has reportedly increased its prices only twice over the past three months, blaming Erdogan for the foreign supermarkets White people, accused of complicity in price hikes, are blaming the Turkish president for the economic disaster.
Commenting on the crisis, Jason Tovey, Emerging Markets Economist, said: Turkey’s staggering inflation is “a reflection of President Erdogan’s harmful policies” and “his desire for low interest rates”, he said. Inflation will remain at very high rates for a long time to come, Turkey in the middle of a perfect storm of high inflation and policymakers are reversing what they really need to do to try to address it.
As the country’s prices rise through rising global energy and food costs, Turkey is also suffering another collapse in the lira and Erdogan’s bizarre monetary policy. As the world’s central banks increase interest rates to tame inflation, Erdogan is turning the tide by stoking price fires in defiance of the traditional economy and forcing the Turkish central bank to cut interest rates, increasing inflationary pressure. Erdogan has called interest rates the mother of all evil.
According to the newspaper, in light of the record high inflation rate, the collapse of confidence in the Turkish government has exacerbated inflation. The currency has suffered a series of crises in recent years after investors and local residents feared Erdogan’s irregular economic policies. The volatile lira has lost more than one-fifth of its value against the dollar so far this year and nearly 80% over the past five years, raising import costs and leading to higher prices. Foreign institutional investors have just given up – though Turkey had some hidden positives, such as demographics, low deficits, and strong private banks, these factors have disappeared altogether – and the weakest domestic market in 20 years has been exposed.
According to the British newspaper, Erdogan is lagging behind many of his rivals, foremost among them Istanbul Mayor Ekrem İmamoğlu, who is described as the biggest potential rival, as confirmed by the British Financial Times in a report, adding that he expected Recep Tayyip Erdogan to respond to the warnings of his close associates by addressing inflation, which reached an official rate of about 80%, before the elections, but he continued to pursue policies that experts described as a bad economic experience, amidst popular attempts to adapt to the worst economic crisis in decades.
Observers believe that the question in the minds of Turkish citizens is whether the widening difficulties herald the beginning of the end for the man who controlled the country’s politics for nearly two decades. The presidential and parliamentary elections were scheduled for June 2023, but they could be held early if Erdogan feels that his chances will improve by calling for an early vote.
