Turkey: economic crisis getting worse
According to official figures, the inflation rate in Turkey soared to 47.8 percent year-on-year in July. The main cause for the trend is the chronically weak lira. It had been hoped that the re-election of President Erdoğan, the new Finance Minister Mehmet Şimşek and the new head of the central bank Hafize Erkan, who doubled the key interest rate to 15 percent, would bring more stability. Were these hopes in vain?
Harbingers of the storm to come
By tightening the reins, Treasury and Finance Minister Mehmet Şimşek could cause a wave of bankruptcies, Cumhuriyet warns:
“Mehmet Şimşek, who declared when he took over his ministry that there was no other option but to pursue a 'rational' policy, has now started to pursue a tight fiscal policy. ... The outcry from the business community, which says it no longer has access to financing, is a reflection of these developments. The slew of declarations of bankruptcy in recent days are like the harbingers of the storm to come.”
Exodus of the young a warning
Ankara urgently needs to turn its economic policy around, warns Der Standard:
“Many young Turks are leaving the country if they can. They no longer see a future there. The recipes against the economic crisis have remained the same, and they have already proved to be ineffective. Inflation is back, the Turkish lira is hardly worth the paper it is printed on. ... Many Turks are having trouble making ends meet. If that doesn't get things moving, the flight of the young should at least be a wake-up call for the power elites in Ankara. If they don't rethink their policies and win back the young, the country will go down the drain for good.”