The Russian invasion of Ukraine and the crisis resulting from the coronavirus pandemic caused energy prices to rise and production problems.
But internally, Erdogan’s unorthodox economic policy, based on low interest rates to combat rising prices, has been the focus of criticism one year before the presidential elections.
The year-on-year increase in transport and food prices stood at 107.6% and 91.6%, respectively, in May.
The state statistics agency did not publish a detailed list of the evolution of product prices, which led the opposition and numerous economists to accuse them of deliberately hiding the magnitude of the increase in inflation.
An independent group of Turkish economists, The Inflation Research Group, said on Friday that current inflation stands at 160.8%, more than twice the official data.
At the same time, rumors of a Turkish military intervention in northern Syria underpinned the depreciation of the national currency, the lira, which lost 48% of its value compared to last year, trading at 16.49 lira per every dollar.
In response, the Erdogan government cut taxes on some goods and gave subsidies to vulnerable households to pay electricity bills.
But he failed to change the trend.
“Without policy change the country faces a systemic economic crisis,” Timothy Ash, emerging markets analyst for BlueBay Asset Management, wrote on Twitter.
Source: Ambito
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