The scale knob can escape once more
Ahead of the 2023 elections, where the fate of Turkey will be determined, the government is expected to ramp up the electoral economy starting in January. The Credit Guarantee Fund (KGF) supported the credit expansion of the economic administration, which is known to be preparing to put capital into public banks after the minimum wage increase, is also on the way.
Economist Dr. Murat Kubilay, each loan created will lead to an increase in physical and dematerialized TL on the market, when the performance of TL is low and there is no confidence in the management of the economy; The result of this, he said, would be the demand for foreign currency and gold.
Kubilay said: “The goal of feeding demand without increasing production is inflation,” and warned: “If monetary expansion gets out of control like in 2020 or if confidence in the economy breaks like in 2021, the exchange rate will never It will remain”. “According to Kubilay, the economic administration may have learned from its past mistakes, but if President Erdogan does not see the result he hopes for in the March 2023 election polls, the balance may be thrown off the balance once again.” .
Economist Murat Kubilay
FACE THE SHIPWRECK
Anticipating that the expected credit expansion of private banks will not materialize in 2023 despite the KGF, Kubilay said that banks’ profitability will also decrease due to various regulations and the time to deal with bad debts will draw closer.
Saying that “in 2023, the capitalization and active use of public banks will once again be the main agenda,” Kubilay conveyed his prediction that the total share of the big three public depository banks and Eximbank in lending will exceed 50 percent. hundred.
2022 will be remembered with inflation in the minds of the people
– Economist Murat Kubilay, “The loss that the public will not forget about 2022 will be Turkey’s re-entry into the inflationary spiral that began in 2004. We are in a long process where price increases will lead to increases,” he said, continuing: “ If the real inflation sentiment is above 100 percent in an environment where the official inflation rate has reached 85 percent and the value of TL is only artificially protected, it is difficult to change perceptions and overcome inflationary inertia.” . Kubilay, who sees raising the high minimum wage and putting the EYT on the agenda by using the voting power of voters as a major gain, said: “However, we must not forget the unsustainable results of these long-term gains.” term.”
An anti-poverty plan is essential
Murat Kubilay, who gave the recipe for getting out of the crisis in a scenario where the opposition won the elections, affirmed that it would be very difficult to maintain the internal and external balance of payments without financial stability, and stressed that arrears must be faced. and the exit of foreign investors must be stopped.
Kubilay said public spending and credit policies aimed at keeping the real sector in the wheels are essential, otherwise a sudden stop in the economy risks increasing unemployment and poverty. Kubilay said: “It takes great skill to carry them out without hurting the fight against inflation,” commenting: “A 3-year stability from June 2023, followed by development and an anti-poverty plan while so much”.
Developments that will shape the year 2023
1 – Despite the KGF, private banks will not be able to extend their expected credit next year.
2- The profitability of the banks will decrease and the time to deal with delinquency will approach.
3 – After the elections, the new government should deal with bad loans and stop the outflow of foreign investors.
4 – To avoid a sudden stoppage of the economy, policies are required to make the wheels of the real sector turn.
5- The recipe to get out of the economic crisis must be carried out without harming the fight against inflation.