ENAG: Probability of inflation reaching 200 percent increases

The Inflation Research Group (ENAG), which consisits of independent academics, stated that the probability of inflation reaching 200 percent has increased. The Turkish Statistical Institute (TUIK) announced annual inflation of 69.97 percent in April. However, in items such as food that affects everyone more, this rate exceeds 100 percent annually.

ENAG, the ‘troublemaker’ of TURKSTAT (Turkstat wants to stop ENAG’s activities) has announced the April inflation rate of 156.86 percent.

Despite regional risks, rising energy costs, a rise in foreign exchange and inflation, which saw a 20-year peak in April, the Central Bank kept interest rates steady yesterday.

Following this decision, ENAG said in its Inflation and Exchange Rate Report it published that the loss of Central Bank’s reserves causing irrepressible loss of creditworthiness due to TUIK’s false signals to the economy, led to further increase in the exchange rate and inflation.

CDS RATIO INCREASES TO 730 MAKES IT DIFFICULT TO HANDLE FOREIGN DEBT AND FINANCE INVESTMENTS

In the report, it was also explained that the real income of the population had fallen due to inflation and growth data of Turkstat that did not reflect the reality and this disrupted the savings/investment balance. Moreover, the CDS ratio, the country’s bankruptcy risk premium, increased to 730s with with deteriorating balances, making it difficult to convert foreign debt and finance efficient investments.