The Turkish leader wants to rock the economy ahead of next year’s parliamentary and presidential elections. Had the vote taken now, neither Erdogan nor his Justice and Development Party (AKP) would have succeeded, according to polls. At the same time, most respondents state the unfavorable economic situation as the reason why they would not choose the current set.
Erdogan Central Bank
However, as the opposition, economists and analysts point out, Erdogan’s policy is not helping the situation now, but on the contrary exacerbating the problems. Along with the fall of the lira, inflation is rising at the same time and is already attacking the twenty percent mark, which is hurting companies and citizens.
“Many companies are dependent on the import of energy, semi-finished products or raw materials from abroad. Imports in hard currencies, euros and dollars. Imports will now become more expensive for these companies, which in turn will be reflected in rising prices for basic items such as fuel and food, ”outlines the Montenegrin problems in Montenegro. According to him, people who can now get rid of savings in lira and buy foreign currencies, or real estate, gold or cryptocurrencies for them.
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The CT correspondent also reminds that Turkey is not experiencing a sharp fall in its currency for the first time. In the 1990s, hyperinflation contributed to the collapse of the then government circles, which were replaced by the Erdogan group, which created favorable conditions for economic growth.
“The technocrats he surrounded at the time are now gone, in opposition, Erdogan is surrounded by loyalists who support his policy,” says Montenegrin, adding that following the actions of the central bank and other key institutions at Erdogan’s will weakens the confidence of Turkish savers and foreign investors.
On Wednesday, Turkey’s central bank intervened and sold foreign exchange for the first time in seven years to ease the fall of the lira. She justified the move with “unhealthy pricing” in the market. In response, the lira strengthened slightly.
We are ready, says ČEZ
Many Czech companies also invest in Turkey, and the impact of Turkish difficulties on their finances depends on how they are secured. CEZ representatives, for example, are said to have learned their lesson. The semi-state company has had problems in Turkey in recent years. “It finances loans in dollars, but local revenues are in Turkish lira. In the past, CEZ Group has acknowledged that the companies in which it has a stake have suffered losses in the billions of crowns, ”illustrates Černohorský.
Although ČEZ does not want to specify more specific plans, it plans to withdraw from Turkey, where it has been operating since 2009. However, the current economic difficulties may complicate the search for bidders to take over the assets there at the price the energy company envisions.
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