President of TUSIAD: Inflation will rise in short term, there is not enough struggle
Orhan Turan, the President of TUSIAD, said that he did not think that inflation had been adequately tackled, adding ”We are not able to implement the right monetary policy or take the necessary structural steps on issues such as agricultural food”.
The Turkish Statistical Institute (TUIK) had announced annual inflation in March as 61.14 percent. According to independent social scientists, this rate is higher. The government expects inflation to fall due to the base effect at the end of the year and is not making a preventive move.
Orhan Turan who was elected the new president of the Turkish Industrialists and Businessmen’s Association (TUSIAD) at the general assembly in March, said that the world had not been adequately fighting inflation: “We cannot prepare the economy for possible global shocks. Think of it like a body, there may be a risk from the outside at any moment. What do you do in such a situation? You take the necessary health steps to keep your body strong. The situation is different in our economy. It was very likely that this wave of inflation would come from the global side. We should have been more prepared for that and done our part. We entered this wave by lowering interest rates when inflation was quite high and the whole world was raising interest rates. There was a currency shock, which was inevitable. It is much more costly to fight it after a shock has come. The important thing is to be prepared for that shock.”
“PRICING BEHAVIOR IS OUT OF ORDER”
”Turan, who stated that inflation could not be fought correctly for the last five or six years, expects the rise to continue in the short term: “Contrary to what is thought, the issue is not only supply-side, but also domestic demand inflationary. I’m not referring to the exchange rate pressure, at all. If you put aside all these facts and believe that inflation is completely caused by global, the diagnosis will be incorrect. In the short term, the inflation outlook is quite challenging. In the real sector, new products are entering stocks at new prices. These will also create price pressure for another round. We see that the forward demand is still creating inflation. Commodity growth is also intense globally. That is why it is possible that inflation will rise even higher in the short term. The fact that the rapid rise in PPI (producer price index) has not yet stopped also indicates that inflation will continue to rise.”
