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Turkish President Recep Tayyip Erdogan.

Annie Gugliotta/ GZERO Media

What We’re Watching: Three ways to address inflation … with varying degrees of success

Erdonomics: Growth > stability

Turkey has long had a hyperinflation problem, but that doesn’t mean that its central bank has sought to raise interest rates to bring prices down. In fact, Turkey’s President Recep Tayyip Erdogan, whose unorthodox economic approach has been dubbed Erdonomics, has even sought to lower interest rates during inflationary times. Why?

Central to his approach is the belief that economic growth trumps all, including price stability. So Turkey’s central bank has been unwilling to raise interest rates to reverse hyperinflation, and Erdogan has even called himself an “enemy” of interest rates.

As the Turkish president explains it, keeping interest rates low – and static – stimulates demand, driving economic growth.

But that hasn’t panned out. Inflation in Turkey soared to a quarter-century high of 85% in October – largely due to roaring food and fuel prices. Crucially, analysts think the official number was closer to 186%, meaning prices would have almost tripled. As a result, the average Turk has far less disposable cash to inject into the economy. What’s more, Turkey has seen its currency, the lira, plummet a whopping 90% since 2008.

What do Turks think of the cost-of-living crunch? They will get to weigh in on May 14, when the country heads to the polls. Erdogan is facing a united opposition that has been pushing the message that he has wrecked the economy.

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Luisa Vieira

The Graphic Truth: Erdonomics vs. Turkish economy

This week, Turkey’s annual inflation rate reached 83.45%, a 24-year high. And that's just the official number — independent experts believe the actual figure is more than 186%, which means prices have almost tripled.

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China overhauls Hong Kong elections; Brazil & Turkey under pressure
China Overhauls Hong Kong Elections | Brazil & Turkey Under Pressure | World In :60 | GZERO Media

China overhauls Hong Kong elections; Brazil & Turkey under pressure

Ian Bremmer discusses Hong Kong's election changes, Bolsonaro's latest cabinet reshuffle, and Turkey's economic problems on World In 60 Seconds.

China has overhauled elections in Hong Kong. Now what?

Well, now nobody that would be in the democratic opposition would really want to run for election in Hong Kong because it's just a titular body that serves mainland China. There is no more one state, two systems policy in Hong Kong. The UK, the United States are angry about it. We've put some sanctions on individual leaders, but that's about it. And China increasingly integrates the small Hong Kong economy into the mainland, and it's considered a domestic sovereign issue. Sorry, it kind of sucks if you're from Hong Kong, and there's not much work we can or are going to do about it.

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