– Prices have risen to levels you never imagined, three or four times higher. Many people cannot even buy eggs or cheese, says Cengiz Igak whom news meets on the streets of Istanbul. Not since the 1990s has inflation in Turkey been as high as it is now. The ongoing economic crisis in Turkey is due, among other things, to the fact that President Recep Tayyip Erdogan launched an experiment in which he tried to fight price inflation by lowering interest rates. Cengiz Igak, whom news meets on the streets of Istanbul, is worried about the economy Photo: Åse Marit Befring – The central bank has cut interest rates six times since September last year, from 18 to 10 per cent. Inflation rates have skyrocketed to 85 per cent, says political economist Ozan Sakar. Lowering the interest rate is the opposite of what is the economic thinking of the gang and which the vast majority of other countries follow. – The theory the bank here follows is that if you increase the interest rate, it leads to increased inflation. I don’t know of any other country or central bank that believes in this. Nor is it supported by any economic theories, says Sakar to news. Replacing healthy food with cheap pasta The Turkish lira has fallen in value since 2013. But it is only in the last year that the value has plummeted. Inflation has at times been the highest in Europe. Many people have to cut back on the amount of food they buy. – People start buying half of what they need a day. The next day they buy half of it again. So of course the situation is not good. We are all worried about the future, says Esra Burak on the streets of Istanbul. Esra Burak in Istanbul says she cannot afford to buy as much food as before. Photo: Åse Marit Befring The Turkish economist says that the central bank has chosen inflation instead of unemployment. – Around 70 per cent of people’s income goes to housing, food and transport. The price increase there has been over 100 per cent, says Sakar. He says that the rent has been raised four times in the past year. Which has led to many not being able to afford to pay rent and having to move out. People can no longer afford to buy normal healthy food either. – The prices of milk, cheese and yoghurt have tripled in the past year. The salary level has not increased. So people cut down on healthy food and switch to pasta and bread, says Sakar. Ozan Sakar is a political economist and meets news in one of Istanbul’s still busy shopping streets. Photo: Åse Marit Befring Can influence the election Next year there are elections again in Turkey. The 68-year-old Erdogan has been president since 2003. This summer it became clear that he is running for re-election. And the economy is likely to become the main theme in the election campaign. – Those who will be elected must cut inflation to prevent unemployment from rising, explains the economist. For many young people in Turkey, today’s economic downturn is something completely new. – Those who are 20 years old do not remember what it is like to be in an economic downturn like now. And they are going to the polls. So I think that will influence the election, says Pinar Tank at the Peace Research Institute in Oslo. The price increase has made Erdogan and his AKP party less popular. At the last poll, they had gone back 11 percentage points since the last election. Pinar Tank of the Peace Research Institute tells news that economics will be important in the Turkish election campaign Photo: Charlotte Bergløff / news – The recession has a big impact on the young people who have been under Erdogan’s rule for 20 years, says Tank, who researches Turkish politics.
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Turkish economy in free fall – news Urix – Foreign news and documentaries
