While the European Union (EU) Commission lowered the economic growth expectation across the EU due to the increase in energy and commodity prices due to the Russia-Ukraine war, it increased the inflation expectation. In the Commission’s Report, it was predicted that the Turkish economy would grow by 2 percent in 2022 and 3 percent in 2023, with inflation at 63.1 percent this year and 54.1 percent in 2023.
In direct proportion to the announced EU Commission report, the price of everything from basic food products to transportation continues to increase in Turkey. The inflation rate announced by Tuik as 61.14 percent in March and 69.97 percent in April is expected to increase further in May. Citizens have doubts about Tuik data due to more than 100 percent hikes in products in the markets. With the depreciation of the Turkish Lira, the burden on the Turkish citizens continues to get heavier. The product bought today is cheaper than the next day.
Turkey breaks export records in agriculture and food, but it also depends on imports in agriculture and food. While it breaks the export record in refined (packaged) sunflower oil, it buys liquid sunflower from Russia. While Turkey is the world leader in flour and pasta exports, it imports wheat. As such, exports have no effect on the domestic market.
Despite the effect of Russia’s invasion of Ukraine, the exchange rate in Turkey, which imports many products from soup to nuts with its import policy, was fixed in the 14,50-14,80 band for a while. But it has been on the rise again since last week. As of today, 1 dollar has reached the level of 15,90 TL and 1 euro has reached the level of 16,73 TL.
As the depreciation of the Turkish Lira against foreign currency continues with the import policy implemented, it seems that the monster of inflation will continue to enslave Turkish citizens.
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