inflation, undefeated enemy of Recep Tayyip Erdogan

“Tea was 1.5 Turkish Lira a year ago. Today he is at 4 pounds. All the prices increase so quickly that I am no longer surprised to see the amounts multiplied by 3 or 4”, says Ali, 27, a trader from the Asian side of Istanbul. “It’s a bit like emotional abuse. We are a little more overwhelmed every day,” he laments.

In his small takeaway shop, he sees the effect of price increases on his customers every day: “We are subject to increases that we are obliged to pass on to the amounts that we display. And since our clientele is rather modest, it is very affected by the situation. » He only earns the equivalent of €1,000 per month, compared to €2,500 last year at the same time.

The central bank against the tide

Each month, in Turkey, the announcement of the level of inflation is awaited with concern. In December, the official index of the statistics organization Tüik stood at 84.39% over one year, after 85.51% in November. The authorities keep announcing the end of this price spike: “Barring any unexpected global developments, the peak of inflation has now passed. We have entered a period of decline,” assured the Minister of Treasury and Finance, Nureddin Nebati.

The decisions of the Central Bank of Turkey, however, do not announce a lull. In principle, to end inflation, a central bank is supposed to raise interest rates. This is what all major central banks are currently doing. But in Turkey it does the opposite, at the request of President Recep Tayyip Erdogan who keeps repeating: “The interest rate is the cause, inflation is the consequence. » A conviction that goes against all economic theories.

On November 24, the Central Bank further reduced its interest rates from 10.5% to 9%, for the fourth consecutive month. Employees who dare to oppose the policy of the hyperpresident are quickly thanked: in the past three years, three directors have succeeded at the head of the Central Bank, a theoretically independent institution.

Students forced to stop their studies

As a result, prices are soaring: 107.03% increase for transport, 102.55% for food products, 82.86% for the real estate market, 62.9% in health, no sector seems spared. The explosion of rental prices in large cities, such as Istanbul, is disrupting life trajectories. More and more students, for example, are forced to abandon their studies because they cannot finance rent or a university residence near their campus.

In order to assess social assistance needs, municipalities and trade unions now calculate a “hunger threshold”, different from the poverty index. In November, the Türk-Is workers’ confederation estimated that a family of four was food insecure below 7,785 Turkish liras (€393) in income, an amount above the minimum wage of 5,500 pounds (€277). .

In the current economic storm, the official figures are disputed: the economist and university professor Veysel Ulusoy has created with doctoral students an Inflation Research Group (Enag) which proposes a different calculation. Its results are higher than the official figures. In November, Enag estimated inflation at 170.7% over the last twelve months.

Independent economists prosecuted

” Why such a difference ? You have to ask Tüik directly,” responds mischievously the researcher, whose Twitter account has 380,000 subscribers. This success is not without risk: Enag has been sued three times by Tüik, which publishes the official index, as well as by a prosecutor from Ankara. The group is accused of disseminating information that would only come under public authority. And particularly sensitive, a few months of crucial presidential and legislative elections for President Erdogan.

Like many observers, Veysel Ulusoy is critical of government policy: “In economics, some developments are easier to control than others. For several years, the Turkish authorities no longer have control over price trends. »

Raising the minimum wage and other social benefits will allow the government to limit the impact on extreme poverty. But by maintaining the price-wage spiral, they will not allow the Turkish economy to get out of the impasse.


In Turkey, a higher price increase than in the rest of Europe

With inflation at 84%, Turkey is clearly above the rest of the European countries. The euro zone average is 10% for the month of November, over a rolling year.

The European countries with the highest inflation are the Baltic countries, Estonia, Latvia and Lithuania, all three at 21%, according to the European index published by Eurostat.

According to the same index, France is at 7% in November over a rolling year, Germany at 11.3% and Italy at 12.5%.


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