Former minister Işın Çelebi is of the opinion that inflation will decline if the potential is used correctly.


Member of the Faculty of the University of Altınbaş, former Minister of Economy Prof. Dr. Işın Çelebi said that the distribution of income in Turkey has worsened with the decisions contrary to the economic logic that started in September last year and that while the income of 4-5 million inhabitants increased, 80 million live in difficulty. Çelebi said: “There is a new order in the world that is closed. Turkey should immediately turn to policies that increase, not suppress, the demand for foreign exchange. The first thing to do is to ensure trust in the promises made. If all of this is done, the Turkish economy will have the potential to improve, “he said.

The Turkish economy is going through a difficult period. We are in a spiral of high inflation. How did it come to this point?

After September 1, 2021, the deterioration of the economy is accelerated by the understanding and insistence on doing things contrary to the logic of economic policy. Inflation, already high, has risen from 30 percent to over 50 percent. The wrong budget policy applied in the country has ruined the balance between income and expenditure. The sharp increases in the costs of non-priority projects caused an unfair distribution of resources, and thus the distribution of income was quickly reversed. While the dollar rate was 8.5 TL in June 2021, it increased 98% to 17.3 TL in June of this year. Annual exchange rate increases were 18% in South Africa, 4% in Brazil and 33% in Argentina. 98 percent in Turkey In terms of exchange rates, Turkey diverges negatively. However, the increase in foreign exchange supply plays a very positive role in reducing inflation.

– The government always says that after six months inflation will go down. I can’t take a step …

An environment in which real inflation will fall and the cost of living will fall may occur in a process where there is an increase in output-productivity and the rise in exchange rates is balanced. It can increase in an environment where living standards and purchasing power rise. Otherwise, the tactics of mathematical calculation, bending and distorting the figures do not change the facts. In the last 24 months, eight dates have been given for the decrease in inflation and, sadly, the decrease has not occurred.


– Nobody believes the announced figures, especially inflation. There is no trust in institutions. The distribution of income has completely deteriorated. The minimum wage was almost the general wage. How to correct this imbalance?

Unfortunately, expectations turned negative as uncertainty and insecurity increased. The cost of living rose over 78 percent. There is no more confidence in numbers and in what is said.

Income distribution worsened with inflation. While the high-income groups have maintained their status, the purchasing power of the lower-income groups has decreased significantly. The middle class broke up. However, the strength of the middle class is very important to the health of a society. Artisans, self-employed workers, small and medium-sized industrialists are in great difficulty. The standard of living of low-income groups, young people, women and retirees has dropped dramatically due to the high cost of living. While the incomes of 4-5 million of the 85 million inhabitants increase, 80 million live in difficulty.

– How does this new model of Turkey end, which you interpret as a game of pulling a rabbit out of the hat?

What I mean by the “rabbit removed from the hat model” is to act outside of scientific realities. Although inflation is said to decline every month, it continues to rise. The cost of living continues to rise. There is no trust in words and numbers. For example, there are 9 million retirees in Turkey. Retirees over the age of 65 earn wages below the minimum wage. These people are constantly told that inflation will go down and the cost of living will go down and that their wages are kept below the minimum wage, which is the minimum standard of living.


– How can Turkey get out of this crisis? What needs to be done?

First, the numbers will show the truth. The facts will be revealed and budgetary discipline ensured. Instead of policies that suppress the demand for foreign exchange, we need foreign exchange earning transactions. Turkey’s increased competitiveness in international competition will be achieved through open growth and inflows of foreign capital. The solution to this is primarily to increase production and efficiency. Increasing Turkey’s international competitiveness is essential. If all of this is done, the Turkish economy will have the potential to improve.

– There are also very important problems in the world. What are the dangers facing Turkey?

The environment created by the expansion of liquidity after the pandemic process around the world has caused an increase in inflation in the United States and the European Union (EU). This process has had a negative impact on the whole world. The distribution of income has deteriorated. From April 2022 a recession and a recession has entered. Tech companies have started to lose value. The effects of this situation will be felt most clearly in 6-18 months. There is a new order in the world. Period of introversion. In addition, the problem of food supply and security of energy supply has arisen. As oil and natural gas prices have risen rapidly, grain supply has become a serious problem. This process pushed inflation in Turkey by a further 20-25%. The inflation level we have reached today is 78% and the producer price index is around 138%. We need a new opening and a new story. We must take the path of full EU membership. The EU must also fulfill its responsibilities.



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