Economic analyst Bingol foresees economic relief amid election uncertainties
In a joint broadcast by Türkiye Gazetesi and TGRT, Omer Faruk Bingol, an economics columnist for Türkiye Gazetesi, shared his insights on Türkiye’s economic landscape before and after the local elections.
Bingol began by addressing the prevailing sentiment in Türkiye before the elections, disputing the notion that the inflationary pressures were solely because of the Turkish Central Bank’s actions.
What would have been the outcome if the Central Bank had refrained from implementing measures?” he asked.
Regarding inflation, Bingol anticipated a surge, highlighting recent trends: “Over the past six weeks, the dollar amount in households’ accounts averaged around $175 billion and escalated to $186 billion an increase of $12 billion. Conversely, the Central Bank’s total gross reserves, standing at $145 billion in December, declined to $123.8 billion last week, indicating a depletion of reserves exceeding $20 billion. Inflation figures will be released this Wednesday, and expectations of a spike nearing 70% are high.”
Türkiye will experience economic relief
Despite these concerns, Bingol expressed optimism about a potential decline in inflation if rational economic policies are upheld. He pointed to factors such as the base effect, an anticipated $60 billion influx into the country in 2024, and a projected weakening of the global dollar.
“With prudent management and the resolution of election uncertainties, Türkiye stands to witness economic respite,” he concluded optimistically.
He stated that if citizens maintain and trust rational policies, Türkiye will experience economic relief. Highlighting President Erdogan’s vocal support for pre-election policies, Bingol underscored the significance of the Central Bank’s decision to raise interest rates before the elections, interpreting them as vital messages for the economy.
Disparity between foreign and domestic perspectives
“Foreign reports exhibit greater optimism compared to domestic sources. Goldman Sachs forecasts a dollar value of $37, while Deutsche Bank anticipates $38, in contrast to the Central Bank’s estimate of $40.5. Domestically, we tend toward a more pessimistic outlook because of psychological factors,” Bingol added.
Lastly, Bingol emphasized the multifaceted challenge posed by inflation, attributing it to psychological and numerical factors, particularly accentuated amid the ongoing local elections, which he deemed a critical juncture for Türkiye’s economic trajectory.
“Inflation represents not only a psychological battle, exacerbated by our current perturbed state but also a numerical challenge; the effects of actions taken require time to manifest in markets and psychology. We are navigating through this period, coinciding with local elections”
