World-renowned economist: I measure Turkey’s inflation at 137%

Steve Hanke, a professor of economics at Johns Hopkins University, criticized the unorthodox economic policies of Turkish President Recep Tayyip Erdogan, after the latter pledged to reduce Turkey’s inflation to 4%.

“He must be dreaming. Today, I measure Turkey’s inflation at 137.76% / year, more than 6 times above the false official interest rate. In the real world, interest rates follow inflation,” Hanke wrote on Twitter.

Pres. Erdogan has pledged to lower Turkey’s inflation to 4%/yr. He must be dreaming. Today, I measure Turkey’s inflation at 137.76%/yr, more than 6x the phony official rate. In the real world, interest rates follow inflation.https://t.co/3att3ZrO2o

– Steve Hanke (@steve_hanke) December 19, 2021

Erdogan strongly defends his unconventional assumption that lowering interest rates will lead to lower inflation.

Once again on December 19, Erdogan defended his economic policy and likened currency instability to attacks on the country’s economy that have their roots in the 2013 nationwide demonstrations that began in Istanbul’s Gezi Park for access to the site. green.

Under pressure from the president, the central bank is steadily lowering interest rates, a practice that sent the pound up to 18.4 against the dollar before Erdogan announced the creation pound deposit protection mechanism, which pushed the Turkish currency to a rapid rise.

Inflation jumped to 21% last month and is expected to pass 30% next year.

In vain the leader of the opposition, Kemal Kilicdaroglu tried to join TurkStat, to prove that the reported inflation is false, but he was not allowed to enter.

At the same time research team announced that Turkey’s real inflation stands at 60%, which the government denied.

In an effort to slow sales and tackle “unhealthy” prices, the central bank is intervening six times this month. Bankers’ estimates show that it has sold more than $ 6 billion of its already depleted foreign exchange reserves.

Petros Kranias