As a journalist who has closely followed the Turkish and world economy since the January 24, 1980 decisions, which created a shock effect when they were announced, I have witnessed many things, experienced many crises, written many articles and several books, and my book titled “To Overcome Inflation” was published in March 1990. In the early years of the Justice and Development Party (AKP), which came to power after 2002, I was criticized for welcoming the steps taken in the economy.
Unfortunately, this period did not last long and our economy became the plaything of an understanding that wanted to consolidate its power and create its own riches. As a newspaper columnist who has lived through all this, I can say that the period in which the Turkish economy was mismanaged and lost its reputation in the world was the period under the Presidential Government System.
Corrupting inflation
We are now seeing how the Central Bank of the Republic of Turkey has been turned into the plaything of the man who rules the country single-handedly and how underestimating inflation, the cancer of the economy, can have devastating consequences. We have all experienced together how Mr. President’s eagerness to grow the economy rapidly without providing the necessary resources has taken inflation out of control and turned Turkey into an inflation champion.
In the graph in the OECD’s periodic report published the previous day, 18 countries with annual inflation rates ranging between 7% and 1% were listed in the 2024 inflation forecasts of the G-20 countries, but Argentina with an inflation forecast of 250% for 2024 and Turkey with an inflation forecast of 50% did not fit in this graph, so they were given a separate corner. This success should not be underestimated.
The tragic adventure of Hafize Erkan
Hafize Gaye Erkan, who was brought from the US as a new source of hope by the One Man regime, which has dragged Turkey into this impasse with irrational policies, as the head of the Central Bank of the Republic of Turkey, made a remarkable speech at the Istanbul Chamber of Industry meeting in December. Stating that she was determined to bring annual inflation down to single digits, the following words of the CBRT Governor were a striking warning: “If we do our part and you believe in it, we can achieve disinflation at minimum cost”.
Shortly after Hafize Erkan made this statement and talked about “disinflation”, which I mentioned in this column on December 6, she became the target of a “disinformation” campaign and was dismissed at midnight.
Fatih Karahan should be careful
Here is the first statement of Fatih Karahan, who started at the CBRT together with Hafize Gaye Erkan and has now been appointed to replace her: “The main objective and priority of our Central Bank is to ensure price stability. In this direction, we continue our efforts to ensure disinflation with determination. We are determined to maintain the necessary monetary tightness until inflation reaches levels consistent with our target. We closely monitor inflation expectations and pricing behavior. We will definitely not allow any deterioration in the inflation outlook.”
He may have said these things with the first excitement, but he should be careful that he does not become the new victim of the inflation defense front and that his promise of monetary tightening is not left hanging in the air.
