There was little evidence of this during his jubilant victory speech on Sunday night, “but Erdogan knew at the time obviously how bad the Turkish economy was,” says Lagendijk. He said at the time that he would not change economic course, but a few days later, according to the correspondent from Turkey, it seems so.
“One of the things Erdogan has clung to for years is the dogma that if inflation rises, interest rates should be cut.”
Turkey faces two persistent problems. The first is inflation, which has been in double digits for some time. “Now it’s about 40 to 50 percent, and that figure really needs to come down,” says Lagendijk. “It’s the most visible problem, because obviously the prices have gone up a lot.”
The second problem is that of the lira, the Turkish currency. Today it has lost almost three percent of its value again. Stopping this depreciation is a priority.’
Matter of days
Lagendijk thinks it’s a matter of days before an economic u-turn comes. “One of the things Erdogan has clung to for years is the dogma that if inflation rises, interest rates should be cut. Exactly the opposite of what most economists say. As a result, the economy in Türkiye has come to a complete halt. I estimate that this policy will end soon.’
End of interest rate cuts
The president is said to be in talks with Mehmet Şimşek, who was economy minister at a time when things were going relatively well for Turkey. “Perhaps he would like to help, but only on the condition that the interest rate cuts end.”
The first outlines will become visible this week, says Lagendijk. “It has to be, because it’s not going to go on like this.”