'Turkey suffering from chronic inflation because of Erdoğan's mistakes'
Turkey has entered a period of chronic inflation, DEVA leader Ali Babacan has said, as he criticized President Erdoğan's economic policies.
Democracy and Progress Party (DEVA) leader Ali Babacan has said that Turkey has entered a chronic inflation period, as he slammed President Recep Tayyip Erdoğan's economic policies.
Babacan, Erdoğan's former economy czar, commented on the minimum wage announced by the president on Dec. 16 and said that it will melt without the citizens even spending it.
Saying that the minimum wage will be paid at the end of January and that the lira lost excessive value since Nov. 1, Babacan noted that the lira's loss of value will affect citizens as inflation in January, February, March and April.
"The minimum wage announced today will start to melt at the end of January, without our workers being able to even spend it," he said.
"I'm sorry to say that Turkey has entered a chronic inflation period," Babacan added.
Turkey hiked its minimum wage by 50% to 4,250 liras ($265) per month to address a currency crash and inflation spike.
The dollar value of the 2021 minimum wage - some 2,825 liras monthly - has tumbled to $175 from $380 at the start of the year due to the currency crisis, Turkey's second in four years.
Earlier on Dec. 16, the central bank delivered a hefty rate cut under Erdoğan's unorthodox economic program.
Erdoğan's decision to push through 500 basis points of monetary easing since September has sent inflation soaring above 21%, and it is likely to blow through 30% next year due to ballooning import prices.
Commenting on the central bank's move, Babacan said that the president is insisting on wrong policies.
"As a result, the lira has lost value and continues to do so. Don't you get that prices increase because of it? Poverty and hunger are increasing," the DEVA leader said.
"The way to decrease interest rates is not through orders. Interest rates can only be decreased through respect for law, justice, democracy and human rights, as well as employing capable, qualified and honest cadres," he said.
"This is a shame. Give up on this stubbornness and wrong policies," Babacan noted.