Black table in the economy in the 22nd anniversary of AKP
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On the 22nd anniversary of the AKP’s establishment, the Turkish economy is facing major problems in inflation, exchange rate and current account balance. The government is looking for a solution in the Gulf.
Today is August 14. Today is the 22nd anniversary of AKP’s foundation.
Turkey is going through one of the most difficult periods of its history in the economy under the rule of AKP, which came to power in November 2002 and has been in power for nearly 21 years without interruption.
Especially in the last 5 years, when the Presidential government system was introduced, Turkey faced currency crises and high inflation.
HIGH INFLATION AND FOOD PROBLEM
While the official inflation of Turkstat, which the majority of the public does not trust, was 47.8 percent in July, this rate was calculated as 112.9 percent by the Inflation Research Group (ENAG).
Official inflation, which reached the peak of 24 years with 85.5 percent in October 2022, is expected to approach these levels again in the coming months.
Calculating annual food inflation as 70.4 percent as of July, Türk-İş announced that the monthly food expenditure required for a family of four to be healthy, balanced and adequately fed is 11 thousand 658.10 TL in July (hunger limit).
This figure has exceeded 11 thousand 402 TL, which is the increased minimum wage from the very first month.
According to Türk-İş, the total amount of food expenditure and other mandatory monthly expenditures for clothing, housing (rent, electricity, water, fuel), transportation, education, health and similar needs (poverty limit) reaches 37 thousand 974.10 TL. rose.
When 2 people in a 4-person household earn the minimum wage, this figure barely corresponds to 60 percent of the poverty line.
It is estimated that 80 percent of the population in Turkey lives below the poverty line announced by Türk-İş.
CURRENCY CRISES: INCREDIBLE VALUE LOSSES IN TL
The Turkish economy has faced frequent currency crises in recent years. Turkish lira, World It has always been at the top of the list of currencies that have lost the most value in recent years.
Starting 2018 at 3.75 level dollar The rate is above 27 today.
Exchange rates, which were kept with reserve sales, transaction restrictions, exchange-protected deposits (KKM), and regulations forcing the transition from foreign currency to TL before the May 2023 election, were gradually “released” after the election.
Due to the high current account deficit, low reserves and high inflation, the depreciation of the TL and the rise in the dollar exchange rate are expected to continue in the coming months.
CURRENT DEFICIT AND RESERVE PROBLEM
The interest and exchange rate policy implemented before the election exploded the current account deficit.
Although there was a surplus in June thanks to tourism revenues, the current account balance gave a high deficit of 36.8 billion dollars in the first half of 2023. Credit growth and imports
It is expected to rise in July despite restraining measures.
High inflation and the expectation of an increase in the dollar exchange rate in a deeply negative real interest rate environment, especially gold and fuels imports, especially automotive.
Although it increased after the election, the Central Bank’s (CBRT) net reserve excluding swap remains close to historically low levels at -49.1 billion dollars.
Moreover, there is a foreign debt of approximately 45 billion dollars in swap and deposit accounts in the balance sheet of the CBRT.
HOUSING CRISIS
Turkey is facing a housing crisis that has deepened in recent years, along with currency and inflation crises.
With the housing turned into an investment tool for domestic and foreign capital, millions of citizens faced a housing crisis, and landlords and tenants almost clashed.
While foreign wealthy people acquired citizenship by purchasing housing, Turkish citizens could not access housing.
The President of the Real Estate Law Association (GHD), Attorney Ali Güvenç Kiraz, announced that while the rental eviction lawsuits were 22 thousand in the whole of 2022, they reached 47 thousand in the first 6 months of this year.
As of May 2023, the average rate of increase in housing prices in Turkey was 103.6 percent. The cumulative rate of increase in housing prices in the last three years has reached 546 percent.
According to the CBRT figures, the average price of a 100 square meter house has increased to 2 million 357 thousand TL in Turkey and to 3 million 600 thousand TL in Istanbul.
YETIS O ARAB!
The government is looking for a solution to get out of the economic crisis in foreign currency from Arab kingdoms in the Gulf.
Many government representatives, especially President Tayyip Erdoğan and the economic administration, frequently visit the Gulf countries and ask them to send money to Turkey.
Lastly, Erdogan organized a tour last month covering Saudi Arabia, the United Arab Emirates and Qatar and made various investment deals.
Due to the foreign exchange shortage, many strategic assets are planned to be sold to foreigners, especially Arabs.
Despite the reactions and the housing crisis, the practice of granting citizenship in return for the purchase of real estate continues.
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