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When a small group of Turkish students began publishing their findings at the end of the year at the end of last year, most of them began to reflect what many Turkish people already think: prices have doubled more than the government says.
The return from Ankara was quick. In February the Turkish Statistical Institute (TurkStat) filed a lawsuit against the independent Inflation Research Group (ENAG), which uses the most advanced methods to track online prices and has confirmed that consumer prices are now about 40 per cent, compared to the TurkStat rate of 19.5%.
“Our goal was not to violate TurkStat or to establish a low-cost approach,” said Veysel Ulusoy, who teaches economics at Yeditepe University and leads a team of 12 volunteers, including PhD students, mathematicians and accountants, on independent work. “But division is everywhere in Turkey, even statistics.”
An Istanbul prosecutor is now investigating TurkStat’s alleged violations of the law’s rules. Ulusoy said the ENAG investigation came out in a peer-reviewed newspaper and said his allegations were false, but the charges against him were expected in the coming months.
ENAG legal issues show how the affected numbers are in Turkey. The government registered very quickly economic growth for more than two decades in the second quarter of this year, but research shows that many Turks feel they have lost opportunities because rising prices and unemployment are on the rise, with many losing confidence in the government. The cost of living, unemployment and wealth complemented the list of respondents in a recent survey.
This undermines the Justice and Development (AKP) party of President Recep Tayyip Erdogan, which has been well-known for two years before the next general election. A survey by the Turkish Census Raporu this month found little support for the ruling party, at 29.9%, and its director Can Selcuki said economic instability was the main reason for the recession.
The central bank, which is meeting to raise interest rates on Thursday, is under pressure from Erdogan to cut interest rates, even though inflation has doubled in the last four years. In March, the President was elected ambassador to Sahap Kavciolgu, a newspaper columnist who supported Erdogan’s assertion that high interest rates were driving rather than pushing inflation.
For a long time Erdogan dominated economic policies, recruited people and fired them by law. He has fired three central bank governors since 2019 for failing to cut interest rates quickly, and the uncertainty that has followed in monetary policy has disrupted one-third of the lira against the dollar.
Kavcioglu has so far refused to be pressured by the President to reduce interest rates by 19%. Consumer prices continue to rise. After announcing this month that the bank is now looking at a significant reduction in tariffs related to price fixing, it was able to offer a discussion at the fourth meeting.
As the global economy struggles with inflation amid high-cost spending during the Covid-19 epidemic, which increases consumer demand and deficits, Turkey Erdogan blames “opportunists” for rising prices. “By reducing inflation in the near future, we will avoid inflation,” he said last week.
In search of the most expensive ones, government officials were sent to major markets last week, according to local journalists. “This is counterproductive because the government does not want to take painkillers,” said Atilla Yesilada, a researcher at Istanbul Global Source Partners. Rising inflation “requires significant interest rates and reduced budget expenditures. And rising rent and food costs are due to design crises that require more time than the AKP should win in the coming elections.”
Other types also show up faster than previously reported. Steve Hanke, a professor of economics at the University of Johns Hopkins, uses a fixed price target based on the dollar exchange rate, and found that customer prices doubled in the TurkStat rate in June.
“Erdogan, like all politicians, wants a slight decline, GDP growth will be more visible, interest rates will be pushed down,” Hanke said. “With all these things going wrong, Erdogan was encouraged to cover up this…
TurkStat has called the media that its data is based on “baseless and false” claims and that its statistics are in line with international norms and standards.
But public suspicion on his numbers is growing. Aksoy’s survey this month showed that more than half of participants believed that the economy had shrunk in the second quarter, while TurkStat managed to grow by 21.7%. Metropoll found that 82% of respondents did not believe what TurkStat said about inflation to 16.6% in May.
ENAG uses web pages to track prices for online retailers every day, tracking the same items and giving them the same weight as TurkStat. Lutfi Elvan, the country’s finance minister, has urged people to ignore ENAG’s findings, saying the group had tried to “tarnish” TurkStat.
“They have no right to mislead people, and they have received a court order,” he said in a televised address earlier this year. He refused to become involved in politics on TurkStat.
Ulusoy initially hoped to partner with TurkStat, giving them dimensions that they may not see here. “Not only in Turkey, any price hike is not right,” he said.
“People are aware that much of ENAG is reflected in the rise in prices in Turkey, based on the amount of money they have in their pocket and the prices on the street,” he said, adding that “even if it is bad, no one wants it.”