Free-Flight Inflation

Free-Flight Inflation


All economic data shows that the price increases in Turkey cannot be stopped, and the great fall in the purchasing power of people on fixed incomes continues. Moreover, the decisions taken Thursday by the Monetary Policy Committee of the Central Bank reveal that inflationary policies will continue in the name of growth. Linking the economic crisis we are experiencing to external influences and forces makes no sense other than to excuse poor economic management.

Ultimately, the transfer of resources abroad becomes inevitable in foreign trade, which takes place in countries where growth is not based on domestic inputs and advanced technologies, with high added value and high competitiveness. TurkStat reported Turkey’s foreign trade terms in March at 75.3% and March export import coverage ratio at 73.1%. Indian economist Jagdish Bhagwati He theorized this type of growth as impoverishing growth. In this structure, there may be capital groups that can adjust their prices and incomes taking into account inflation and even earn more (for example, banks announced large profits in the first quarter of this year) , as well as the fact that the majority of citizens cannot meet their basic needs such as food, housing, clothing, education, health and have to borrow.

STAGFLATION STATUS IS CLEAR

Last week, TURKSTAT regarding the month of March “Agricultural input price index”explained what. It was observed that the prices of agricultural inputs increased by 15.6% in March compared to the previous month and by 105.7% compared to the same month of the previous year. Considering that a significant part of agricultural inputs (fertilizers, pesticides, animal feed, etc.) are imported, it is understood that the prices of inputs will increase even more with the increase in the exchange rate.

On the consumption side, the CPI rate in April rose to 69.97%, while the increase in food prices was 89.10%. The Food and Agriculture Organization of the United Nations warns that a global food crisis could arise due to the climate crisis and the war between Ukraine and Russia. However, the most important risk for us is that, while our farmers suffer from the cost of agricultural products, households cannot be fed properly due to rising consumer prices.

A similar dramatic situation is experienced in housing prices and rents. On the one hand, the construction sector is contracting due to rising costs and housing sales are falling, on the other hand, there are exorbitant increases in housing prices and rents. announced by the Central Bank. “House Price Index”increased by 9.3% in March compared to the previous month and by 110% compared to the same month of the previous year.

DEEP POVERTY IS OBSERVED

In research conducted by Türk-İş, the hunger limit for a family of four was set at 5,000,323 liras and the poverty line at 17,000,340 liras in April. In our country, where the minimum wage is 4,000,253 lire, 50% of the approximately 30 million employees are paid at minimum wage level. This means that most workers live below the poverty line. When we include 13.6 million pensioners, up to 7.6 million unemployed, farmers, craftsmen and small businesses, the vast majority of citizens struggle with deep poverty.

According to March data from the BRSA, it can be seen that the use of consumer loans and individual credit cards exceeded 1,000 billion lira in total. The amount of non-performing debt, on the other hand, increased by 133% compared to the same period of the previous year and reached 27.3 billion lira. On the other hand, it was revealed that companies, most of which are SMEs, are having difficulty repaying their debts, and the number of enforcement cases has increased by 1 million since the beginning of the year to reach 23, 5000000.

“Interest is the cause, inflation is the result” In the economic policy created by saying this, one tries to control both the interest rate and the exchange rate, contrary to economic science. At the point where we are, the reserves are exhausted, the heavy debt burden has occurred, the resources have soared, the growing poverty of the people is seen in the spiral of high inflation and devaluation . The largest price increase in April, food inflation, was for onions; our post Aşık Mahzuni ŞerifLet’s end with a string of: “For those who are fed at the back of the nation / How can the heart that sees this bear / Yigit needs dried onions / I don’t know, should I tell you or not?”



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