Will Erdogan be blamed for Turkey's falling economy ?

Deteriorating Inflation, low economic growth, currency and trade balances, growing government debt, no foreign investment, and the budget deficit are all indicators of a troubled Turkish economy.

Last week, after a midnight decree from President Recep Tayyip Erdogan dismissed three central bank officials, the lira fell to nine versus the dollar and continued to drop.

Turkey’s stagnant economy is now on the verge of collapse owing to Erdogan’s growing economic interventionism. 

The loss of the Turkish lira’s value against the foreign currency has led to an increase in inflation rates in the country, skyrocketing the prices of all consumer items, including food. Experts warned the lira is unlikely to recover in the next stage after it plunged following an upheaval at the central bank.

According to the New York Times, a Turkish government poll found that 63 per cent of respondents, including the vast majority of Erdogan’s supporters, believe the country is on the brink of a terrible recession.

Although Turkey’s exports have grown by more than 50% over the past five years, Erdogan’s forceful interest rate interventionism has harmed Turkey’s macroeconomic components, most particularly the currency rate. 

Traders are concerned that following the creation of a new managerial team in the Central Bank, Recep Tayyip Erdogan would become more involved in the Turkish Central Bank’s activities.

The lira has consistently ranked among the worst-performing currencies in recent years and may be headed for 10 versus the dollar by year’s end. Turkish citizens’ rush to trade their liras for dollars and euros last week.

In light of reduced opportunity in recent years, droves of educated young Turks have moved abroad. More than 330,000 people left Turkey in 2020 and more than 40 per cent were under age 35.

On the other hand, European tourists expressed little interest in visiting Turkey despite the lira’s rapid fall against the euro. In 2020, the number of tourists visiting Turkey reduced to 12.7 million from 45 million in 2019. 906,000 Russians, 611,000 Germans, and 324,000 Ukrainians visited Turkey in 2020, with the rest coming from Iran and Bulgaria.

All of this, along with increasing budget deficits and government debt, analysts are gloomy about Turkey’s future economic prospects and advocate for comprehensive reforms to prevent the nation from collapsing into a dark abyss.

As the Turkish Lira continues to collapse, the question on everyone's mind is: will Erdogan be blamed for Turkey's economic shortcomings ?