President Tayyip Erdogan said he had lowered Turkeyinflation was around 4% previously and will do so again, having surpassed 21% following a push for aggressive interest rate cuts he designed.
Erdogan said the policy, which collapsed the country’s pound, was part of a successful âwar of economic independenceâ.
He says it will boost exports, jobs, investment and growth, but most economists call it reckless and predict inflation will exceed 30% next year.
The lira hit a record low above 17 against the dollar on Friday. Hit by fears of an inflationary spiral, the currency has lost 55% of its value this year and 37% in the past 30 days.
In a meeting with young Africans on Saturday which aired on Sunday, Erdogan reiterated his unorthodox view that interest rates push prices up, adding that inflation is hopefully expected to come down soon. .
âSooner or later, just as we lowered inflation to 4% when I took office, we will lower it again. But I will not let my citizens, my people, be crushed by interest rates, âErdogan said.
Annual inflation fell to around 4% in 2011, when Erdogan was prime minister. It has been up slightly since 2017 and jumped in November by 3.5% over the month and 21.3% over the year.
Many Turks have said that a 50% increase in the minimum wage announced by Erdogan on Thursday – and widely supposed to raise consumer price inflation by 3.5 to 10 percentage points – would be insufficient.
Speaking on Sunday, Erdogan said TurkeyThe s problems were due to âunreasonable attacksâ on the economy and called calls for capital control âridiculousâ.
âThe limited rate cuts we have made cannot be the cause of this image,â he said.
Exchange rates were “the weapon of the game that was played on Turkey“, and once they and prices stabilize,” we’ll see the doors to a much larger, modern Turkey open to us within a few months.
Under pressure from Erdogan, the central bank has cut rates by 500 basis points since September. He says the model will boost exports, jobs, investment and growth.
The Saturday, TurkeyTUSIAD’s largest corporate group called on the government to abandon the low interest rate policy and revert to âthe rules of economicsâ.
Opposition parties want an immediate election, but Erdogan, in power for 20 years, has rejected the call. National elections are scheduled for mid-2023.
On Sunday, he called TUSIAD’s statement an attack on the government.
âOur government’s economic policy is progressing exactly as we have determined, with the exception of temporary exchange rate volatility,â he said. “I call on all of my citizens to stand more firmly alongside their state and government on the economy.”
Thousands of people demonstrated over the weekend in Istanbul and the southeastern city of Diyarbakir against the soaring cost of living.
Some ferry lines operating from and to Istanbul were halted on Sunday due to unsustainable costs resulting from the pound crash, operators said.