I have recently attended a meeting as a guest speaker, where I also had the chance to read the efficiency report jointly prepared by Enerjisa and IDEMA. Below you will find my interpretive summary of this report, containing some quite valuable findings.

The Federal Reserve and the ECB continued to increase rates, stressing that inflation is still a major threat. Last week, we watched the CBRT Chair speak to the press, also emphasising the same point.

Once upon a time, in summer, factories would temporarily stop production, movement in big cities would slow down, monthly inflation rate would be very low or even drop to negative figures, then demand would revive again as autumn begins. This pattern remained intact in the late 1980s, and the early 1990s, when I started my first job.

The difference between the founding philosophies of the countries brings along economic, social, diplomatic and political differences as well. For example, an American explains the founding philosophy of the United States as follows:

As far as I see it, the so-called "return to rational policies" actually involves trying to reduce inflation by stifling demand through high taxes and restricting loan growth. The Government might be able to reduce inflation eventually if it waits long enough to see the fruit of its efforts, which is restricting loan approvals while increasing loan costs, and constantly hiking prices and taxes. The problem is that this waiting can last forever.

The CBRT decided as expected. It however declared right after that that it would make changes to some of the measures implemented so far. Introduction of required reserves for the KKM scheme, for instance, means transferring funds from banks to the Central Bank at first. But, this practice continues, banks can be expected to become reluctant to offer the KKM instrument to their depositors.

The Central Bank made its decision. The policy rate is now 17.5 %. Inflation is around 40 %. But we have to think before making a comment.

As of Monday, private banks have decreased their deposit interest rates by 10 points compared to the previous week. The decline in both the KKM rates and time deposits indicates that the banks have taken position prior to the Central Bank's rate decision. The 3-point drop in TRY/Foreign Deposit ratios at the beginning of last week has also played a part in that decline.

The rise in VAT rates and SCT on fuel products seem to have marked the last week in Turkey. Although the economy Minister is new, their narrative remains old: “Nevertheless, fuel prices in Turkey are cheap compared to Europe.”

Let's remember what happened after the elections: - Policy rates have been increased to 15% - Minimum wage has been increased - VAT rates and some other cuts have been increased .

The Government has not announced a full-fledged "new economic plan" yet, which indicates that this hybrid model will continue until the local elections. Given this fact, we should know that the following problems will remain unaddressed during the process. - Exchange rate fluctuations will continue at full pace. - Interest rate hikes rates will continue as well, with a growing gap between deposit and loan interest rates. .

The fact that Turkey has suddenly given green light to Sweden’s NATO membership, and has agreed with other member countries with regard to inviting Ukraine to join NATO indicates the beginning of a new and different diplomatic process.

As of yesterday, the new tax hikes entered into force. I expect that many mistakes will be made in VAT calculations, but as with any change, people will eventually get used to it. However, ever-increasing taxes on essential goods and services create a higher cost of living and make it impossible for people to save money.

Right after the elections were concluded, I said that if the President announces the new economic programme, it means he stands behind it, but if someone else does it, there is a problem.

The most striking detail in the official inflation rates was the fact that the core inflation turned out to be higher than the CPI. The core inflation is around 47% compared to the CPI, which is 3.92% on a monthly basis but is around 38% on an annual basis. This data shows us that the decline in inflation is due to the base effect and is only seasonal. So, it is quite likely that the CPI will potentially rise again in the autumn.