Turkey, Erdogan’s “economy first” fails: consumer prices increased by 31%

“Economy first”, Erdogan’s new mantra, is not bearing the hoped-for results. Two months after his victory in the presidential elections, the economic knots are still on the drawing board. While there has been growth, albeit in alternating phases, inflation has increased dramatically. According to data from the Turkish Institute of Statistics (TÜİK) dated August 3, the annual rate of inflation rose from 38.2% in June to 47.83% in July. Consumer prices increased by 9.49%, compared to June. The ongoing economic crisis in the country has visibly widened the economic and social gap, especially in the metropolis on the Bosphorus.
Under the leadership of Erkan, the new governor of the central bank – a supporter of economic orthodoxy – the Turkish monetary institution had established an increase in interest rates, from 8.5 to 15 percent, with the aim of countering the rise in inflation. However, although it is a change of course, the extent of the increases seems to be below the expectations of the international markets and investors, within a national framework where power remains -almost exclusively- in the hands of the head of state
The numbers speak for themselves. According to the Turkish Statistical Institute (Tüik), consumer prices increased by 31%. Transportation costs have increased by 17.8% since June, while the monthly increase in the prices of health services was 13.6%. The increases affect all sectors, from restaurants to hotels, from the prices of alcoholic beverages to tobacco products. As expected, the economic crisis exploded, in all its evidence, in the post-election phase. The next electoral appointment for Erdogan is the administrative elections of 2024: that date is already seen as a testing ground, not to be underestimated. On the foreign policy side, the Turkish leader’s hunt for international investors continues unabated, both on the western side and in the Gulf countries. One thing is certain: the new race between change and continuity is full of obstacles. And the question marks and the discontent of the population are still all on the table.