Categories: WORLD

“We will not let inflation crush our nation,” Erdogan

ISTANBUL — Turkey’s president announced on Saturday a 7 percentage-point reduction in taxes added to basic food supplies as the country faces rampant inflation.

President Recep Tayyip Erdogan said the value-added tax would be lowered to 1% from 8% on food purchases. His decision would be published in the Official Gazette and go into effect Monday.

Erdogan said that, in addition to the tax discount, the government “expects” food companies to lower their prices by 7%. He said those foods play a significant part in inflation.

Official data for January showed inflation rose to a staggering 48.69% annually, though independent experts say it’s more than 115%.

“We will not let inflation crush our nation,” Erdogan said.

Critics, however, say the country is suffering from high inflation because of Erdogan’s insistence on lowering interest rates. He believes inflation is caused by high interest rates, in opposition to established economic theory.

The central bank, whose independence has been eroded by the government, had brought down the key policy rate by 500 points since September to 14 percent, but paused rate cuts in January. A currency crisis was triggered by the cuts and the Turkish lira hit record lows in December. Because Turkey relies on imports for its energy needs as well as raw materials and many food supplies, prices have skyrocketed.

The lira closed this week at 13.49 against the dollar. The record low in December was 18.36.

Erdogan’s Minister of Treasury and Finance, Nureddin Nebati, also announced a step to encourage people to bring gold that they have been keeping “under the pillow.” He said 1,500 gold drop-off locations would begin operation on March 1 to integrate the precious metal into the financial system as deposits.

He added people would be able to withdraw their gold in physical form if they wished to.

The FINANCIAL

Since 2005

Recent Posts

Second Bank Employee Admits Role in Fraud Conspiracy

PROVIDENCE –  Another former bank employee today admitted to a federal judge that she stole…

5 days ago

Sussex County Woman Sentenced to 34 Months in Prison for Concealing Terrorist Financing to Syrian Foreign Terrorist Organizations

A Sussex County, New Jersey, woman was sentenced today to 34 months in prison for…

5 days ago

Brooklyn Park Man Pleads Guilty to His Role in $250 Million Feeding Our Future Fraud Scheme

Liban Yasin Alishire has pleaded guilty to his role in the $250 million fraud scheme…

5 days ago

Former CEO Of Email Security Company Sentenced To Five Years In Prison

Damian Williams, the United States Attorney for the Southern District of New York, announced today…

5 days ago

Trusted B2B Trading Platform

In today's fast-paced and intensely competitive business world, it is necessary for organisations to constantly…

5 days ago

Part-time working can boost economy and bring economically inactive people back into work

A major new research report into the flexible furlough scheme from Cranfield University’s School of…

5 days ago