In March, inflation in Turkey reached a new peak in the last 20 years – over 61%. According to law professor Ersan Sen, today 59% of people in Turkey have financial difficulties. “Another 27 percent say they can barely make ends meet.”
In the markets of the country, it quickly becomes clear what this means. “I go to the market twice a week – on Mondays and Thursdays. I always buy the same goods from the same stalls. Even between Monday and Thursday, prices have risen,” said a man at a market in Istanbul. According to him, in just a few weeks, prices have jumped by nearly 50%.
There will be no change soon
However, the Turkish authorities do not seem to take the situation so seriously. In a speech after the announcement of the new inflation rate, Turkish Finance Minister Nuredin Nebati sounded as if he had no idea that there was a crisis in his country. “Trade is doing well,” he said.
Inflation in Turkey has been high recently. Its percentage has been in double digits for years. Both companies and people suffer from this. Expert on the subject Khaki Öztürk of Turkey’s Bahçeşehir University believes the situation will not improve. “Inflation is likely to reach 70% and then fall slightly. In the best-case scenario, however, it will be around 45-50% by the end of the year,” Ozturk said.
This is becoming a growing problem for the economy. Staff costs are low, but the jump in prices is huge. In the transport sector alone, official statistics show inflation of around 100% per year. In Turkey, which is poor in raw materials and dependent on imports, rising energy prices internationally act as a catalyst for inflation. According to Ozturk, the government is responsible. Despite all the economic principles in such a situation, the authorities continue to lower interest rates. “If interest rates had not fallen, neither the exchange rate would have been so bad nor inflation so high,” he said.
Low-interest rates for more investment – this is the basis of the so-called. “Turkish Economic Model”. The Minister of Finance claims that it just takes time to work. He confirms that interest rates are low compared to inflation, but says the pound’s exchange rate against other currencies is stabilizing, albeit at a very low level. He predicts that this will continue. “After that, agriculture will produce more. There will be a boom – because of the favorable climatic conditions in the country. In addition, trade is alive, we hope the war will end soon. And tourism revenues will exceed our expectations,” said Nebati.
“And you would make Turkey one of the most successful economies.”
However, it is the tourism industry that is most concerned about the war in Ukraine. Because millions of tourists came from Russia and Ukraine. For now, it is unlikely that Ukrainians will spend their holidays in Turkey this year. But this is not the reason for the bad situation in the country. According to Faik Oztrak, a spokesman for the main opposition Republican People’s Party, only the government is to blame. “You said that you would make Turkey one of the ten largest economies. But you only manage to put it in the top ten countries with the highest inflation in the world. Who is responsible for all this? Who is in charge of this country? Of course. – Recep Tayyip Erdogan. “
