ANKARA (Turkish Zaman) – An economic report by Oxford Economics for Economic Consultancy warned of the seriousness of the situation in Turkey and Argentina in light of high inflation rates and an increase in loans.
The report said that Turkey comes after Argentina in terms of monetary expansion in developing countries, and stressed that the increasing loans in the recent period fuel inflation rates, saying: “Inflation rates are not a good indicator for Turkey and Argentina, which are facing large monetary expansion rates, amid the decline in the financing capacity of their banks Central. Argentina faces an uncertainty regarding the fiscal deficit in 2021, and Turkey is witnessing a rapid increase in the borrowing rates of citizens.
The report indicated that many developing countries are witnessing an increase of about 14.5% in the average money supply or cash stock compared to 2019, saying: “The increase in the money supply in Argentina reached 106%, while in Turkey it reached 39%. While the increase in the United States of America itself is only 23%.
The economic expert, Dr. Murad Kubilay, explained that the decline in domestic demand as a result of the Corona epidemic caused a decline in inflation rates, but that inflation rates in Turkey are witnessing jumps as a result of packages encouraging borrowing and interest-cutting policies, and he said: “Argentina went through a similar phase two years ago.”
Dr. Kubilay explained that there is an increase in foreign currency and gold requests in Turkey, but it is not known who gets these currencies and how to allocate them.
Inflation in Turkey last August was 11.77.
The Fitch Ratings Agency announced that it kept Turkey’s credit rating at the level of BB-, indicating that the high current balance deficit caused by the decline in foreign reserves, weak fiscal policy, negative real interest rates and relatively strong loan incentives boosted the external financing risks.
–
–
