Erdogan turns to austerity, with ultimate aim of reducing inflation

Erdogan turns to austerity, with ultimate aim of reducing inflation
Erdogan turns to austerity, with ultimate aim of reducing inflation

The public spending spree on which Turkish President Tayyip Erdogan has built his political career is set to hit the brakes as the government prepares to freeze new projects to focus on fighting inflation.

The savings plans include slowing down some early-stage infrastructure projects and halting new projects unless deemed necessary over the next three years, according to an official document published yesterday by Bloomberg. This would likely impact major projects such as the Istanbul Canal, Erdogan’s proposal to build a new waterway linking the Black Sea to the Sea of ​​Marmara.

Other measures include a freeze on the purchase and rental of vehicles and real estate used by the government, as well as reductions in public sector recruitment and social events for foreign delegations, according to the document.

It’s another sign of Erdogan’s policy reversal before last year’s national elections, when he relied on cheap money and increased social benefits for voters.

Since then, the benchmark interest rate has been raised nine times, up to 50%, to moderate inflation which is soon expected to peak around 75% per year. The cost of living crisis hurt the president’s popularity in local elections in March, when Erdogan’s Justice and Development Party (AKP) also suffered a historic defeat in key cities. The budget also remains limited by the needs for rehabilitation spending following the deadly earthquakes which hit the country in February 2023.

-

-

PREV Global oil demand will peak in 10 years, says Goldman Sachs
NEXT Trump trial: the fate of the former American president is in the hands of the jurors | Donald Trump facing justice