Turkish Statistical Institute (TurkStat) President Erhan Çetinkaya said that profit increases of companies in Turkey are exorbitant and that has an effect on high inflation.
speaking to journalists in a meeting Çetinkaya said that corporate profits have an upward effect on inflation and spoke as follows: “If the exchange rate falls, prices would decline.” Çetinkaya listed the reasons for the low June inflation as “the price course traditionally in the summer months, the stagnant course of exchange rate increases, and postponed hikes”.
TurkStat President Çetinkaya stated that corporate profits increase independently of inflation and said, “Corporate profits in Turkey have an upward effect on inflation, this has been shown academically.” TURKSTAT President Çetinkaya came together with journalists at a chat meeting. Erhan Çetinkaya made a presentation to journalists about the issues of interest in economic circles and answered their questions.
Çetinkaya tried to explain why the calculation of the prices of around 100 products covered by the CPI was abandoned. The meeting was marked by the price table that EKONOMİ columnist Alaattin Aktaş tried to calculate by tracing the index series of prices that TurkStat stopped announcing in 2022. The head of TurkStat said that this table had no meaning for them. Stating that average price calculations may vary, Çetinkaya said, “While prices are increasing, the monthly average increase does not reflect the highest increase that is last remembered.” Alaattin Aktaş, on the other hand, explained how he made the calculation in his article today: “I am not calculating inflation, I am trying to lift the curtain on prices that are kept like a state secret.”
In his presentation to journalists, TurkStat Governor Çetinkaya frequently emphasized high corporate profits and their impact on inflation. Çetinkaya said, “Corporate profits are increasing above inflation. In Turkey, corporate profits have an upward effect on inflation.” Referring to Prof. Dr. Ensar Yılmaz’s research on how corporate profits rose after the COVID pandemic, he said, “Exorbitant corporate profits in Turkey have an upward effect on inflation, this has been shown academically.”
“In Turkey, the ratio of wages in income distribution is decreasing and profitability is increasing,” Çetinkaya said, adding, “This is also the case in Europe: corporate profits have a 45 percent impact on inflation, while labor costs have a 4.5 percent impact. Moreover, corporate profit increases are exorbitant in Turkey, not abroad.”
The lawsuit filed by DISK
The head of TURKSTAT explained the process regarding the lawsuit filed by DISK, which took the non-disclosure of the prices of the items within the scope of the CPI to the judiciary, as follows: “They asked for the information we stopped calculating through CIMER. They could not get it because it required additional calculation. They sued the Ministry of Justice’s Information Acquisition Board, not TurkStat. They received an illegal stay of execution decision. Since the decision could not be implemented due to actual impossibility, they filed a criminal complaint against TÜİK executives, but the prosecutor did not deem it necessary to investigate. They applied to the Constitutional Court.”
Why did TurkStat stop publishing prices in the CPI?
Erhan Çetinkaya, the President of TÜİK, gave the following information:
- When prices increase, the monthly average increase does not reflect the highest increase in recent memory.
- Since product prices are monthly averages, they may not reflect the current situation of the following month (especially seasonally transitory items such as fresh fruits and vegetables and clothing).
- The components that are called products or items are actually aggregated and cause misperception (e.g. tomatoes are the average of 3-4 varieties, gasoline cars are the average of 10 vehicles).
- No other country announces inflation on the 3rd day of the following month. A few countries announce it on the 7th and most on the 10th-15th.
- Because before 2022, like ITO, we could only announce it with field data (grocery stores, greengrocers, markets, markets, hospitals, private schools, etc. ….). With the studies that started in 2020, 50 percent of the total data is now collected digitally and the amount of data has increased many times over. From 500 thousand prices to 600 thousand prices (all cash register data of the biggest markets, web scraping, etc.).
- While the account is barely catching up, we have given up “calculating” prices that have no narrative, this is a loaded, heavy work that no one else in the world is doing.
