Turkish President: We will overcome the price increase in a short time, and those who are waiting for our obstacle will be disappointed
Retail prices in Istanbul rise by 80% year on year
Tuesday – 2 Shawwal 1443 AH – 03 May 2022 AD Issue No. [
Turks buy at a fruit and vegetable market in central Ankara (AFP)
Ankara: Said Abdel Razek
Turkish President Recep Tayyip Erdogan has promised that his government will overcome high prices within a short period of time. He said Turkey had paid special attention to investment, employment, production and exports at a time when the world was fighting the Corona epidemic and the crisis arising from the war in the northern Black Sea between Russia and the Ukraine.
Erdogan added in a speech to representatives of workers in the defense industry in Istanbul last night that his government will continue its efforts to create a more prosperous future for Turkey, explaining that those waiting for Turkey to stumble will again be disappointed.
He pointed out that the Turkish economy has been facing real challenges for some time, and that some of these challenges stem from global developments and the other part stem from internal dynamics, saying that “we always have the living standards of workers are improving, and in this context we have increased the minimum wage by more than 50 percent, and despite this we realize that our workers earn more than this percentage. ”
Erdogan added that the wars and conflicts in our region and the experiences we have gained from our fight against terrorism once again show how important every project we tackle in the field of defense industries is.
At the same time, the Istanbul Chamber of Commerce announced that retail prices in the country’s largest city rose by 11.36 percent on a monthly basis in April. It jumped 79.97 percent year-on-year, reflecting the continuing effects of the currency crisis, which began late last year.
Wholesale prices in Istanbul rose by 5.33 percent on a monthly basis and 73.21 percent on an annual basis, according to the Chamber of Commerce, with Istanbul’s population accounting for about a fifth of Turkey’s 85 million people.
Turkey is witnessing an unprecedented wave of price increases, amid a historic jump in inflation, which recorded 61.14 percent last March.
The Turkish Central Bank raised its inflation forecast towards the end of the year. The head of the bank, Shihab Kaucioglu, said that inflation in the country would peak at around 70 per cent before June this year, while some estimates expect it to rise to around 75 per cent.
During his presentation of the second inflation report last week, Davutoglu added that inflation would start to fall after May, noting that the growth driven by exports and the current account balance is important for price stability.
The International Monetary Fund has announced that it has lowered its growth forecast for Turkey and increased its forecast for annual inflation. In his report on the “Global Economic Outlook”, he said he expected Turkey’s economic growth to fall from 3.3 percent to 2.7 percent for the current year.
In its report released last Wednesday, the Fund raised its forecast for annual inflation in Turkey from an average of 15.4 percent to 60 percent. According to forecasts published by the IMF in January, the Turkish economy is expected to grow by 3.3 percent this year and next.
Turkey’s inflation rate has risen since last autumn when the lira fell after the central bank launched a long-awaited cycle of monetary easing by President Recep Tayyip Erdogan, including lowering interest rates by 500 basis points, between September and December.
Last month, Standard & Poor’s, the international credit rating agency, downgraded Turkey’s debt in the local currency to a non-investment grade, while maintaining a negative outlook for the country, emphasizing the foreign exchange rating.
The agency downgraded Turkey’s local currency debt rating one notch to “B +”, which is four levels lower than investment grade, citing the impact of higher energy prices as a result of the Russian war in Ukraine. While Standard & Poor’s maintained Turkey’s foreign currency debt rating at B +, pointing out that the repercussions of the military conflict between Russia and Ukraine, including rising food and energy prices, will further weaken Turkey’s already fragile balance of payments and exacerbate inflation. Which scored 54.4. percent in February (February).
The agency added that inflation in Turkey is on track to record an average of 55 percent during the current year, the highest level among all countries giving it sovereign ratings.
And last February, the international credit rating agency, Fitch, announced the downgrading of Turkey’s sovereign rating to non-investment grade, due to a number of factors, including the country’s inability to handle high inflation.
The agency downgraded Turkey’s credit rating from “B +” to “BB negative” with a negative outlook. The rating was four notches lower than investment grade. Fitch said that “Turkey’s expansionary monetary policy, including negative real interest rates, could consolidate the rise in inflation to high levels and increase public finances’ exposure to the depreciation of the exchange rate and inflation, which ultimately affects business confidence locally, and pressure foreign reserves. “