The Age of Erdoganomics Has Come
A tourist uses a selfie stick to photograph himself at the Sultanahmet mosque, also known as Hagia Sophia, in Istanbul, Turkey, on Sunday, Oct. 2, 2016. Turkish food prices showed the biggest monthly drop seen in September, bringing annual consumer inflation to the lowest level in over a year and giving more leeway to monetary policy makers to cut borrowing costs this month.
Kostas Tsironis/BloombergTurkish President Recep Tayyip Erdogan’s economic strategy looks like it has just been vindicated, with a little help from one of the largest statistical revisions in the country’s modern history.
Following the release of reworked gross domestic product data series by the country’s statistics agency, Turkstat, this week, the Middle East’s largest economy now appears to have expanded much faster than initially thought in the years after the financial crisis.
Given that in those years the debate about policy in Turkey was dominated by Erdogan’s more unorthodox take on economics, this is being interpreted as a boost to the president and his allies.
Their counter-intuitive stance has argued that higher interest rates will only help accelerate Turkey’s chronic inflation problem and that external imbalances are not a reason to avoid lowering lending costs. Inflation came in at 7 percent last month.