Inflation in Turkey has soared to its highest level since 2003. In August, the annual rate of consumer price inflation had reached around 18% but in September it was almost 25%. Food prices rose by 6.4% in September alone.
Turkish consumers have been facing severe double-digit inflation for almost two years now, largely thanks to the currency crisis, which has sent the prices of imported goods sky-high.
A failed coup against President Recep Tayyip Erdogan, his authoritarian tendencies and his criticism of the central bank – which he insists should keep interest rates low – have all caused investors to lose confidence in the country’s political and economic stability. The lira has lost half its value against the dollar since 2016.
Viewpoint
“When Elon Musk, the founder of Tesla, announced in August he had plans to take the company private, the news did not come as a complete shock…research has alleged that leaders of publicly-listed companies find it hard to implement a long-term vision, say by developing investment plans, because of the pressures of quarterly earnings reports… But there is a catch: the data on company activity may not support [this view… US data covering] 2.7 million ‘firm-years’ suggests that listed groups actually invest 48.1 percentage points more – not less – than private ones, after adjusting for sector and size. More remarkable still… when privately held companies went public, their R&D-to-physical-asset ratios increased by 34.5 percentage points, and their “R&D-to-total investment shares by 17.1 percentage points”. When publicly listed companies went private, however, there was ‘a reduction in R&D investments’”.
Gillian Tett, Financial Times