First of all, we all need to know one thing: Although the deterioration of economic parameters is mainly caused by the economy administration’s ill-timed decisions, mere economic actions will not be enough for achieving improvement.
Accordingly, I’d like to remind you of something that is desperately expected by many people: “Exchange rates and interest rates will fall after the elections.”
Here is my answer: “No, they will not”.
Well, there may be a small decrease in exchange rates, as we all know however, local elections are ahead. İf no party wins enough seats to have a majority in the parliament then we should expect another election. It looks like leaders will continue with their harsh words and phrases in election rallies. Under the circumstances, it seems unlikely for TRY to achieve stability.
And a decline in exchange rates seems even more unlikely while there is a global rise in exchange rates and Turkey is currently struggling with diplomatic challenges and having difficulties to attract foreign capital. Accordingly, account owners might be expected to put their money into a 3-month deposit or savings account, thus taking advantage of upcoming stable rises in interest rates.
So, in my estimation, inflation rate may hit 14% in August under the circumstances. But, there is one thing that we should avoid at all costs: “Getting used to it”
People always get, sooner or later, used to good as well bad things. If we get used to ever-increasing exchange rates or inflation rates, it would only be a matter of time before we become like Argentina, economy both rates standing at 30%. Don’t be mistaken, this is not a disaster scenario. To the contrary, it is a highly probable forecast.
“Your enemies will never become your friends… But, don’t let your friends turn into your worst enemies…”
No matter what the election result yields, Turkey will have to mend ties with the United States and the EU, and carry out the recent bilateral relations Russia and China with according to internationally acceptable standards. As I have always said, nothing good will come from merely turning to the east as the EU is Turkey’s biggest trading partner. Turkey’s export performance in China is quite poor. Let’s be real! I have one advice for bureaucrats and politicians who are going to read this report this morning. Let me tell you a funny story.
A few years ago, a troublesome customer walked into a restaurant I have been constantly frequenting. He made a big fuss over some minor issue. Waiters did their best to calm things down. So, I asked for the manager and told him 80-90% of your restaurant seats are filled by your old customers and they always try to ignore your mistakes, because they are happy. They are treated equally. But if continue to show strong interest in this new troublesome customer, suddenly everyone will start behaving the same way, eventually disrupting the order in this place. You may lose your existing customers…
And that’s the end of it. I paid for that customer just to be left with the receipt of peace and calmness.
Let me conclude with a thousand year old poem:
“Seen such people
Took their friends for granted
Worked day and night to turn enemies into friends
Enemies did not become friends but
Friends became enemies
Both allied together defeat was inevitable…”
The only truth that will seal the fate of Turkish economy is hidden between the lines of this poem. It is up to us to find out.