Professor of Finance Economics at Cairo University, Dr. Hassan El-Sadi, said that the recent set of economic decisions by Turkish President Recep Tayyip Erdogan had believed that he would control over them. Inflation rate By reducing interest rates, which it considers its main enemy to revitalize the economy, and this is a correct approach, but when you have large surpluses of export and the ability to attract investments from abroad to the inside, but the winds came with what the ships did not like.
Al-Sadi added in an interview with “Al-Arabiya”, today, Tuesday, that the inflation rate in Turkey increased to 78.6% last month over the same month last year, although at the end of 2021 it was between 15% and 16% and the Turkish president no longer controls inflation. After hitting the highest level in 24 years since 1998, unofficial figures in Turkey indicate that inflation figures range from 175% to 180 percent.
He explained that the Turkish economy has big problems represented by a negative real rate of return, and therefore Turks do not put their money in banks and buy products, which puts pressure on prices, pointing to the high trade balance deficit to $2.737 trillion.
Dr. Hassan Al-Sadi said that the problem currently is not financial restructuring or financial reform, but rather an economic reform problem, because the balance of payments deficit reached 10.6 trillion dollars, and this is linked to the economic sectors.
He added that the cost of imports rose by 1.14% and exports rose 1.5 percent, but the problem is that the inflation rate in producer prices increased by 138 percent, which indicates the existence of problems in structuring the economy that do not focus on monetary policies and raising interest rates from the Central Bank.
The professor of finance economics said that Erdogan believes that his policy may lead to a decrease in unemployment when it rose to 11.3%, and he cannot interfere in the economic reform now because he will interfere once morest businessmen, which may cause him to lose the upcoming elections.
Inflation in June approached 80%, reaching its highest level since 1998, despite repeated government promises to curb prices.
The significant rise in consumer prices, which reached 78.6% on an annual basis, is due to the collapse of the Turkish lira, which lost regarding half of its value within a year once morest the dollar.
Food prices rose by regarding 93% in June, and the cost of transportation increased by 123% for means of transportation.
Last week, the government raised the minimum wage by 25%.
Despite ever-accelerating inflation and fears of new price hikes linked to the war in Ukraine, Turkey’s central bank still refused to raise the interest rate, which has remained stable at 14% since September.
