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Rate of inflation in Turkey higher than officially announced: independent economists

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Turkey’s rate of inflation in September is almost four times higher than the officially announced figure, according to an independent group of academics who are working on key data that map the country’s economic performance.

The Turkish Statistical Institute (Turkstat), the authority responsible for publishing inflation data and other key figures, announced a 0.97 percent inflation rate for September, while the Inflation Research Group (ENAG) calculated it to be 3.61. 

The group started calculating economic figures amid recently rising suspicion over manipulation of Turkey’s official economic data by the ruling Justice and Development Party (AKP).

Trust in official figures, mainly the inflation and unemployment rates, has deteriorated since the switching of the country’s parliamentary system to an executive presidency in 2018.

Over the past two years, Turkish President Recep Tayyip Erdoğan has replaced two chairs of Turkstat. In addition, 10 regional heads were reshuffled in June. According to critics, Erdoğan did not want to see officials resisting the AKP interference in the economic indicators.

Following the replacements at Turkstat, Ali Babacan, leader of the newly founded Democracy and Progress Party (DEVA) and a former economy chief from the AKP, said in an interview that it was clear to people what would happen when the institute’s managers do not work in tandem with the AKP.

Birol Aydemir, former head of Turkstat and co-founder of DEVA, said earlier in October that Turkey’s economic data had been “detached from reality” since the new officials at the institute were hand-picked by the AKP based on their loyalty to Erdoğan.

In its basket of goods and services consumed by households, Turkstat has replaced many foods that saw high price increases with those having a low increase while calculating the inflation rate. Aykut Erdoğdu, deputy chair of the main opposition Republican People’s Party (CHP), said Turkstat had also reduced the weight of food, housing, transportation and clothing in the inflation calculation package.

“If things continue to go like this, [the AKP] will [even] remove food from the inflation [calculation] package,” Erdoğdu claimed.

With a lower inflation rate, the AKP is aiming at paying less to millions of civil servants and retirees as their salaries and pensions are linked to the increase in inflation, Erdoğdu added.

The debate over the inflation rate has been underway since 2019, when it hit 15-year record high. The topic had been brought to the agenda of the Turkish parliament many times by the opposition parties, questioning in detail the manipulation in the inflation calculations. However, Berat Albayrak, Erdoğan’s son-in-law and finance minister, has refrained from answering the questions.

Professor Veysel Ulusoy, an economist who leads the new ENAG initiative, said they were using standard international calculation methods to determine the inflation rate. He added that they would be publishing their figures on a monthly basis.

Unemployment rate is also disputed

Critics have also questioned the unemployment figures in the country. The officially announced number was 13.8 percent unemployment in September. However, the Confederation of Progressive Trade Unions (DİSK) said the rate had surged to 50 percent in May, meaning nearly 17.2 million jobless people.

The opposition claimed the current rate was even higher than stated due to the pandemic. Erhan Usta from the CHP drew the public’s attention to a change made in the questionnaire used to calculate the unemployment rate.

Since the beginning of the year, people have been asked whether they were looking for a job, rather than if they needed a job. As a result people, who have given up searching for a job have been dropped from the unemployment figures, Usta claimed. With the changed question, some 3.2 million people were allegedly disregarded by Turkstat in its statistics.

Turkey’s economy minister losing ground: poll

An opinion poll published in September said support for the finance minister had plummeted to 4.9 percent. The survey was conducted when the Turkish lira hit a series of record lows against the US dollar, trading at one point at an all-time low of 7.8 to the dollar.

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