What they say is the opposite: Inflation accelerated, broke a record
The economic administration promised that inflation would decrease and a current account surplus would occur with interest rate cuts, but the opposite occurred.
Treasury and Finance Minister Nureddin Nebati said in a statement yesterday: “We broke inflation’s neck in November, we broke its back in December,” but in January the picture was different.
In January, TÜİK’s consumer inflation reached the peak of the last 9 months at 6.65 percent per month. Although annual inflation fell from 64.27 percent to 57.68 percent due to the base effect, monthly inflation, which was 1.18 percent in December, almost doubled in January.
THE PRICE HAS BEEN HIGH DESPITE THE FIXING PRESSURE
Despite government pressure to fix prices in many sectors, especially markets, and to keep exchange rates flat with extraordinary measures in January, inflation accelerated due to deteriorating inflation expectations, cost increases and rapid credit growth.
With the high inflation in January, it became very difficult to reach the inflation target of 22.3 percent by the end of 2023 announced by the Central Bank last week.
January inflation, which averaged 1.47 percent over the 10-year period 2012-2021, broke the all-time record for the index with 11.10 percent in January 2022. January 2023 was the second peak in the history of the index.
HE SAID ‘We broke his neck in November and his back in DECEMBER’
In his statement yesterday, Nebati claimed that they will further reduce inflation, saying, “Although we passed 2022 with high global inflation, it started to decline in November.
This trend also continued in December. We broke his neck in November and his back in December.” he said.
In a comment he shared on Twitter following today’s high inflation, Nebati pointed to the drop in headline inflation due to the base effect and included the following statements:
“The downward trend in inflation, which began in November, also continued in January. Consequently, annual consumer inflation, which was 64.27 percent in December, fell to 57.68 percent in January.
The current data indicates that we have left the most challenging period of inflation behind us and that the next few months will be much better”.
‘MY FIELD ECONOMY’
In the period when the central bank cut the interest rate from 19 percent to 9 percent, while inflation rose to the highest level in 24 years, Erdogan said: “I am an economist” and that they will continue to cut interest rates.
In his statement the day before, Erdogan said: “Interest rates in the world have been rising constantly. On the contrary, I fought to lower the interest rate. For the moment we will lower the interest rate to 9 percent, ”he said.
Repeating the words “Interest is the cause, inflation is the result,” Erdogan said, “There may be some who do not believe this. My field is economics, and the result is obvious.”
OPEN REGISTRY IN FOREIGN TRADE
The foreign trade deficit, which broke a record by reaching 110.2 billion dollars in 2022 with an increase of 138 percent, began 2023 with a record.
In January, the foreign trade deficit broke a record with 14.3 billion dollars per month.
The government’s promise that “with interest rate cuts, the foreign trade deficit will decrease or even increase” was the exact opposite.