After Turkey election win, what problems does Erdogan face next?
Al JazeeraNov 28, 2022
The Facts
In order to combat the nation's skyrocketing double-digit inflation, Turkey's central bank has increased its benchmark interest rate by 500 basis points to 40%.
Following Thursday's move — which comes as inflation reached 61% in October — the Turkish lira traded at 28.766 to the US dollar.
The Spin
Narrative A
The Turkish economy has been plagued by skyrocketing inflation and a perpetual crisis for years, which has left Turks struggling to afford essential commodities or pay utility bills. Erdoğan's unconventional policy of lowering interest rates to combat inflation has been reversed since his re-election in May. The new strategy signals that Turkey is taking the required steps to rein in out-of-control inflation and will ensure sustained price stability in a short period.
Narrative B
A years-long dearth of a stable fiscal policy is exactly what has led to Turkey's economic crisis, and Erdoğan's sudden return to traditional policies — which has caused the Turkish lira to tumble to record lows against the dollar — will only exacerbate the issue. There's no relief in sight for Turkey, which is weathering an unprecedented financial crisis thanks to Erdogan's careless steps.
