AKP is leading the Turkish economy to destruction!

Tuesday, October 4, 2022

The Turkish economy is taking blows one after another. Last Friday, the international credit rating agency Standard & Poor’s (S&P) updated Turkey’s credit rating. ‘B+’ to ‘B’ dropped it. Thus, Turkey fell 6 steps below the investment grade level. What this meant was that Turkey quickly moved away from the modern world and became an introverted economy like North Korea. As we move away from the investment grade level, foreign capital comes less to establish a factory and open a business in our country (in fact, it does not come at all, the hope of coming with the final decision has decreased). ? Of course the rates go up.

Why is the note dropping? The AKP’s application of the law and economic rules according to its own mind. Foreigners want to trust the legal system one hundred percent in our country. The greater the government’s influence on the law, the more insecure they feel; because they think that in the event of a court case tomorrow, the decision will be biased, they do not want to endanger their investments. Likewise, the fact that the Central Bank’s decisions are made in line with the government’s request makes foreigners nervous. Because the right decisions are not taken, the economic structure is damaged and companies are negatively affected by this, which prevents investments from coming to our country.

It’s good if the problem is just the note. The registration and report of bad management, which we call grades… Inflation stands as a big problem in front of us. According to the TURKSTAT figures yesterday, the Consumer Price Index (CPI) increased by 83.45% year on year and 3.08% monthly in September. But the thing that made me worry the most was the sharp increase in producer prices. When we look at those figures, Domestic Producer Price Index (D-PPI) increased by 151.50% annually and 4.78% monthly. For your comparison, let me say this: PPI will be 14.33% in September 2020, 43.96% in 2021, 151% in 2022…

In the title, I say that the AKP is destroying the country’s economy, let me explain it item by item:

1-We have always said that the AKP has established a foreign-affiliated model. As the economy revived and production increased, imports of semi-finished products increased and foreign exchange depleted in reserves. The dollar shortage pushed the rate up. This was an inevitable result, even if the world was in peace and health.

2- While the above-mentioned foreign-linked system produced exchange rate increase and accordingly inflation, epidemic and war came upon it. Costs have increased even more. This increased the rate of inflation.

3- As if all this weren’t enough, Erdogan got into a dangerous game to reach the Central Anatolian voters with high Islamic sensitivity. He began to irrationally lower interest rates. Instead of doing things that would reduce inflation, they entered the show… As a result, the exchange rate went up and input costs increased, inflation accelerated even more.

4-Wrong after wrong continued. About 8-10 million immigrants, including Afghans and Arabs, were accepted into the country. This situation quickly pushed up the housing and food prices in the foreign-dependent Turkish economy. As agricultural production fell during the AKP period, Turkish farmers reduced production when cost increases came on top of it. As the population increased, production fell and prices went up. We saw the same in the housing market. When demand is high and production is low, rents and sale prices have skyrocketed.

5-Hold on, the destruction begins now: AKP has predicted 461 billion TL as 2022 budget deficit. In August, the budget had a surplus of 33 billion TL. Then we will see an expenditure of 500 billion TL for the last 4 months of the year. It is obvious that Erdogan will throw money into the market, especially in the KGF, worth at least 200 billion TL at the beginning of the year. Doesn’t that much money drive prices up while production is stable? Inflation occurs when the amount of money in an economy increases more than the amount of goods and services produced.

The reasons I listed above have made the PPI 150% as of now, and the money AKP will give to the market for the election economy will increase the PPI to over 200% after the summer months are over. While this situation will be a complete destruction for the citizen, it will mean an increase in the zeros in their bank accounts for the producers and usurers who will benefit from this money.

After the abundance of money in the market until the election, a tightness like a horror movie, inflation and bankruptcies will be waiting for us…

I will say, may God help us, but the Almighty God is with smart people… I hope that we can use that mind to solve these games and do what is necessary at the ballot box.