Erdoğan pledges to ‘eliminate inflation from daily life’

President Recep Tayyip Erdoğan has stated that his government is working to restore the purchasing power in the country and alleviate the high cost of living, pledging to “eliminate inflation from citizens’ life.”  The opposition press mocked him for finally admitting to economic problems. It may well be so, but his explanation is not faulty policies, but “foreign powers” trying to corner him by sending illegal refugees across the border, and others who constantly plot to undermine the economy.


In his lengthy speech after the Cabinet meeting, the president stated: The economic burdens emanating from the global crisis also have an adverse impact on the balance of domestic markets and inflation in the country, Erdoğan stressed during a press conference after a cabinet meeting in the capital Ankara on Aug. 21.

“Today, we accept some economic challenges in our country. Yet, we also possess the determination, experience, potential and a comprehensive program to overcome these issues,” Erdoğan expressed.


The government’s fight against inflation will encompass two tracks consisting of supervising incorrect and unlawful practices on the one hand and implementing measures and regulations on the other.


“The pressure on inflation from various reasons such as the increased taxes for earthquake recovery, wage hikes for civil servants, minimum wage of workers and retirees will gradually diminish over time,” Erdoğan said.


“In the upcoming months, we will progressively introduce additional measures to reduce income inequality among wage earners.”


The president also highlighted that the government’s foremost priority in the economy is to elevate the welfare of all citizens to the highest attainable level.


“From laborers to civil servants, small business owners to retirees, I expect all my fellow citizens to exercise a bit more patience, place trust in us, and support the steps we have taken and will take,” he added.


Pointing out the strong increase in the Turkish Central Bank’s reserves, Erdoğan said the reserves have increased from $98.5 billion at the end of May to over $116 billion as of Aug. 11.


International investors are closely following the positive developments in the Turkish economy, Erdoğan said, adding that they also have started to understand that the dark picture sought to be drawn through smear campaigns against Türkiye in the lead-up to the elections was unsubstantiated.


“This is also evidenced by the fact that the [credit default swap] CDS value, followed as a risk indicator in the financial markets, dropped by almost half compared to May.”


Stressing that the agreements signed last month with Gulf countries worth more than $50 billion show the confidence felt for Türkiye, Erdoğan said, “We will see that long-term direct investments will further increase in the period ahead.”


“To that end, we will encourage the transition to the Turkish Lira denomination in bank deposits and accelerate steps to consolidate reserves. Our aim is to reinforce the employment- and production-focused economic functioning by reinvigorating that recently sluggish credit mechanism,” Erdoğan pointed out.


While  working to combat inflation at all costs, his ministers are currently negotiating a new salary hike with public service white-color employees, which is expected to be in excess of accumulated COLAs.  The president stated on another occasions that retirees and civil servants have been unjustly treated and ought to be rewarded with better pay.


PA Turkey supposes that the hard work of reconciling better pay, achieving income equality and fighting inflation with no clear mandate for rate hikes falls upon Mehmet Simsek.


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Published By: Atilla Yeşilada

GlobalSource Partners’ Turkey Country Analyst Atilla Yesilada is the country’s leading political analyst and commentator. He is known throughout the finance and political science world for his thorough and outspoken coverage of Turkey’s political and financial developments. In addition to his extensive writing schedule, he is often called upon to provide his political expertise on major radio and television channels. Based in Istanbul, Atilla is co-founder of the information platform Istanbul Analytics and is one of GlobalSource’s local partners in Turkey. In addition to his consulting work and speaking engagements throughout the US, Europe and the Middle East, he writes regular columns for Turkey’s leading financial websites VATAN and and has contributed to the financial daily Referans and the liberal daily Radikal.