Big difference in inflation calculations

Although exactly two years have passed since the interest rate reduction operation was launched on the instructions of President Tayyip Erdoğan, important differences have emerged in the calculation of historical price increases during this period.

There have been unprecedented gaps between the rate found by the Turkish Statistical Institute (TURKSTAT) and the rates found by the Istanbul Chamber of Commerce (ITO) and the Inflation Research Group (ENAG) with respect to cumulative inflation in the 24 months between September 2021 and September 2023.

According to TÜİK data, the accumulated inflation in two years was 196.3 percent, while this rate was 259.2 percent according to İTO, which measures Istanbul inflation, and 558.8 percent according to the calculation from ENAG.

Even according to TÜİK’s calculations, while the period in which inflation reached 100 percent was the fastest in Turkey’s history, that is, the general price level doubled more quickly, the rates calculated by ITO and ENAG indicate that the situation may be much worse than the official figures.

WHICH IS THE CORRECT ONE?

Many citizens believe that the rates announced by TÜİK do not reflect the real pace of price increases that they have experienced in their lives.

A basket of goods and services worth 100 TL in September 2021 will be worth 100 TL in September 2023; According to TÜİK, it increased to 296 TL, according to İTO, it increased to 359 TL, and according to ENAG, it increased to 659 TL.

The purchasing power of 100 TL forgotten in September 2021 has decreased to 33.8 TL according to TUIK, 27.8 TL according to ITO and 15.2 TL according to ENAG.

Although the interest rate, which was lowered before the election due to voting concerns, was raised quickly after the election to avoid a balance of payments crisis, it appears that it is not easy to repair the damage created in the last two years .

A WRONG ACCOUNT CREATES GREAT INJUSTICE

The incorrect calculation of inflation brings with it great injustices and wrong decisions in the economy.

While companies that managed to raise prices well above cost increases achieved record profit increases in the last two years with the help of cheap loans, they suffered huge losses in real terms for the working class, whose wages rose by around TÜİK official inflation.

As a result of an incorrect calculation of inflation, the calculation of interest became difficult. The flight to gold, real estate and cars due to hyperinflation caused the current account deficit to skyrocket and sparked a housing crisis.