Erdoğan relates Turkey’s skyrocketing cost of living to ‘global crisis’

President Recep Tayyip Erdoğan has associated the rising cost of living in Turkey with a “global crisis,” saying he is aware that people are overwhelmed by it.

Erdoğan, who released a video Monday on the occasion of the 22nd anniversary of the establishment of his ruling Justice and Development Party (AKP) on X, formerly known as Twitter, said, “We are aware that our nation has recently been distressed by the high cost of living, caused by the effects of the global crisis on our country.”

AK Parti’nin, milletimizin bağrından doğan bir siyasi hareket olarak Türkiye’ye hizmet için yola çıkışının 22’nci yıl dönümü…@Akparti çatısı altında yürüttüğümüz Türkiye’ye hizmet mücadelemizde birlikte yol yürüdüğümüz tüm kardeşlerime şükranlarımı sunuyorum. #AkParti22Yaşında pic.twitter.com/utebG9ApUS

— Recep Tayyip Erdoğan (@RTErdogan) August 14, 2023

He said just as his government has resolved “every problem in the country,” it will also solve the problem related to the high cost of living.

The president did not explain which “global crisis” was affecting the Turkish economy.

Turkey has been going through economic turmoil driven by high inflation of nearly 50 percent, which has made millions of people earning a monthly minimum wage of 11,400 lira ($421) struggle to cover costs for food, housing, energy and other expenses.

Turkey’s annual inflation, which exceeded 85 percent in late 2022, stood at 47.83 percent in July, according to official data, although a separate study released by independent economists from the Inflation Research Group  (ENAG) who question the official data put the July figure at 122.88 percent, up from 108.6 percent in June.

Meanwhile, the Turkish lira has lost around 30 percent of its value since late May.

Although Erdoğan relates the increasing cost of living in the country to a “global crisis,” without naming it, he has been accused of exacerbating the economic situation by objecting to interest rate hikes.

He spent the past two years promoting a “new economic model” that makes ultra-low interest rates a priority.

Erdoğan supports the unorthodox belief that faster economic growth that usually accompanies low rates reduces unemployment and naturally brings down the cost of living.

A new economic team he established following his victory in the presidential and parliamentary elections to stabilize the lira and he bring down inflation made a U-turn, with the central bank hiking its main interest rate for the second month in a row in July.

After years of cuts that aimed to boost growth but fueled inflation and caused the lira to tumble, the bank doubled its rate last month from 8.5 percent to 15 percent.

The bank said after the first rate hike in June that the move was only the start of a process aimed at bringing Turkey’s annual inflation rate of nearly 40 percent to single digits “as soon as possible.”