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Turkey's Inflation Hits New High: Will Erdogan Lose the 2023 Election?

Nov 05, 2022

Turkey's Inflation Hits New High: Will Erdogan Lose the 2023 Election?

this video was brought to you by tldr store and if you want your order to be personally delivered by the entire trdr team anywhere in the world, please watch until the end of the video to find out how on Thursday the official statistics authority of

turkey

announced the Statistical Institute from

Turkey

that

Turkey

's year-on-year

inflation

rate had hit a 25-year

high

of 85 percent in October and if that doesn't sound bad enough, unofficial estimates push the actual

inflation

figure even

high

er, but nonetheless This

Erdogan

has made it clear that he plans to continue cutting rates that have already fallen 8.5 percent in the last 18 months, so in this video we're going to take another look at

Turkey

's economic woes.
turkey s inflation hits new high will erdogan lose the 2023 election
While most analysts expect things to get worse and how all this interacts with

Turkey

. upcoming

election

s scheduled for June next year ER foreign unorthodox economic policies in the past, so if you want to know more about the situation in general, you can go and see the main thing. However, what you need to know is that, in part, Because

Turkey

's economy is

high

ly dependent on imports,

Turkey

's

inflation

rate has increased over the last year or so, now usually central banks raise rates to reduce

inflation

, but

Erdogan

he believes this idea is a conspiracy advanced by the so called interest rate lobby and instead prefers to cut rates which is exactly what he has done and to make this unorthodox economic policy happen

erdogan

has basically fired anyone central banker who has tried to raise rates and as such the central bank has cut rates from March 19, 2021 to 10.5% today as predicted by ortho economists doxos, this has not slowed down

inflation

and year on year

inflation

has increased from 20 to 85.5 in the last 12 months and this is the

high

est

inflation

rate seen in

Turkey

since the entry into force of Erdoğan.
turkey s inflation hits new high will erdogan lose the 2023 election
Power 20 years ago when by the way he came to power promising to bring

inflation

down from crazy 90s

high

s also worth saying if the official figures weren't the rather bad unofficial estimates suggest things are even worse than the Statistical Institute

Turkey

is admitting that a separate index measuring

inflation

in Istanbul compiled by the city's Chamber of Commerce put the true figure at 107 while another unofficial index developed by the independent

inflation

research group did A group of academics and Former government officials put it even

high

er at 185. However,

Erdogan

is apparently undeterred and has made it clear that he plans to continue his rate cut last month.
turkey s inflation hits new high will erdogan lose the 2023 election
He said that he wanted to reduce rates to single digits by the end. of the year and at a recent rally, he said that he continued to cut rates while he was in power as

Turkey

's

inflation

rate is currently at almost 100 percent and seems unlikely to come down any time soon. Being in chaos, however, evoking expectations,

Turkey

's economy is holding up quite well, at least according to official statistics. stics in 2021

Turkey

's GDP grew a beautiful 11% and this year it looks like it has reached over seven percent now this growth has been driven by a mix of consumption and exports for example in the second quarter the consumption rose 22.5 percent, while exports rose 16.5. percent and in a way this makes sense if

inflation

is really

high

but interest rates are low then there is no reason for people to hold on to cash they just want to double it as fast as they can which significantly increases the consumption similarly,

inflation

has weakened the lira, which has made

Turkey

's exports much more competitive for the context, a dollar now buys almost 19 liras against 10 liras last year and five liras in 2019 and As such, the depreciation of the bills has made Turkish products cheaper for international buyers, which has improved their export.
turkey s inflation hits new high will erdogan lose the 2023 election
However, the market, although growth is strong, is not all good for the most part. Turkish wages have not kept pace with

inflation

, which is bad news for

Turkey

's labor market. Retirees and retirees have also been hit hard, in fact the main beneficiaries have been the banks in

Turkey

, which saw their profits increase fivefold in the last year. Furthermore, most analysts expect

Turkey

's growth to slow significantly in the coming months. JPMorgan forecasts 2 percent. contraction for the third quarter and zero growth for the fourth quarter now this is basically because as

inflation

erodes wages and people quickly spend all their savings consumption dries up quickly as people suddenly realize that they have run out of money, so there

will

obviously be a recession. it would be bad news for ordinary Turks, but it would also be quite scary for

Turkey

's public finances, while

Turkey

's debt-to-GDP ratio is quite low, around 35 percent, about half of those debts are denominated in foreign currency and about $180 billion in bonds are coming in. due only in the next 12 months and since the lira is worth very little right now, if a recession

hits

, they may have a hard time paying it off.
turkey s inflation hits new high will erdogan lose the 2023 election
These debts and that is, broadly speaking, the reason why the credit bureaus that basically measure the probability of a country defaulting on its debts have been downgrading

Turkey

today. It means a default is still likely, but there's certainly a chance a recession could also be bad news for

Erdogan

, who is running for re-

election

in June

2023

, while polls suggest his AKP party is still on track to be the biggest party or just beer by a slim margin, they are likely to

lose

their parliamentary majority and their Coalition partner, the Nationalist Movement party, polls less than 10 percent and could easily fall for below the seven percent electoral threshold.
turkey s inflation hits new high will erdogan lose the 2023 election
Similarly, polls for the presidential

election

suggest that the most popular opposition candidates are now neck-and-neck with

erdogan

and a couple of recent polls have given Kamal Khali chidogo a tentative lead over erd oganogo is the leader of the main party

Turkey

's opposition party, the Republican People's Party, which leads a six-party opposition Alliance with a shared platform Focus only on abolishing the presidential system of government in

Turkey

that gave word one executive powers in 2018. Polls were

2023

already they are neck and neck so if

erdogan

oversees a recession in the coming months we can expect the opposition to push on although this may sound like good news to anyone who has had enough of

erdogan

he is unlikely to go down without a fight and that's because

erdogan

will

likely try to divert public attention from

Turkey

's failing economy and h He is moving towards foreign policy, a subject with which

Erdogan

is much more comfortable and, worryingly, he could do so by provoking conflict with the Kurds in the east or Greece in the west. and at the end of the day there is no guarantee that you would even accept a peaceful transfer of power in general, then the stage looks set for a dramatic contest in

2023

, especially if

Turkey

's economic chaos continues and if all of that is too much for you.
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