“We are fragile until the elections”

Turkey As we prepare to go into the election with high inflation and a deep economic crisis, inflation is expected to fall below 50 percent and growth to slow after the election due to continued currency pressure. Stating that the economy may be in a fragile equilibrium until the elections, Prof. Dr. Refet Gürkaynak said that with credit expansion leading up to the elections, growth could be around 5-6 percent, and that a slowdown was inevitable afterwards. of the elections.

DEPENDING ON THE BLOW OF THE WIND

Gürkaynak continued: “The pressure to ‘give credit’ to banks will increase, at least until the elections. It won’t be good either. In another economy, we can grow 5 percent, while a tenth of what happened in Turkey would be flat. Growth could approach 6% this year. If the power changes, we will slow down, if not, we will slow down again. It is possible to manage until the election, but we are in a very fragile balance”. Delivering a speech at the EY (Ernst & Young) Turkey Tax Conference, Gürkaynak said of the current economic situation: “It may or may not be like this until the elections. It depends on which way the wind is blowing. If you had asked in the summer, I would have told you you weren’t going, but then you had $24.5 billion of net errors and omissions. Money in September 2021
Our politics are out of control. We saw the results of this first in the exchange rate and then in inflation. My guess is that if we can continue to suppress the exchange rate, inflation will hit 40 percent from May-June.”

Prof. Dr Refet Gurkaynak

It is not possible to do business in this environment.

East Pointing out that the current situation is that inflation fell from 85 percent to 40 percent with the base effect, Prof. Dr. Refet Gürkaynak emphasized that if the necessary measures are not taken, inflation will start to rise again. Stating that inflation is not an external situation for Turkey, Gürkaynak stated that it is not possible to do business with inflation fluctuating between these rates.

We ate the reserves to camouflage

TurkeyStating that Turkey is at a crossroads regarding inflation and that the effect of the Central Bank’s bad monetary policy (CBRT) is seen on exchange rates and inflation, Gürkaynak said: “Reserves are a valuable thing. We ate reserves to camouflage the exchange rate effect of bad monetary policy. Last year, in September 2021, our monetary policy went crazy. We saw the results of this first in the exchange rate and then in inflation,” he said.