‘Will the burden of reducing inflation be borne by wage earners?’

The Central Bank did not change its inflation expectations in the second Inflation Report of 2025. Economist Prof. Dr. Serap Durusoy, who evaluated the report and economic developments for 12punto writer Dr. Şenol Çarık, said, “The crucial point in the statements was this: It is not very easy to say anything forward-looking regarding interest rate decisions, but the statement that ‘we expect support from demand for disinflation at this point’ created an association in my mind: In the coming period, the burden of reducing inflation will be borne by wage earners.”

Central Bank Governor Fatih Karahan stated during the presentation of the second Inflation Report of 2025 that there was no change in the year-end inflation forecast. Expressing that the tight stance in monetary policy will continue, Karahan said that the decline in services inflation has begun and that the decrease in the KKM (FX-protected deposit) balance is positive for the Central Bank's balance sheet.
Evaluating the report and economic developments, economist Prof. Dr. Serap Durusoy said:
“We see that the existing problems are approached positively in the statements. It can be said that the statement, ‘Interest rate cuts may be implemented as long as the main trend of inflation follows the path,’ also strengthened expectations a bit more. However, the crucial point in the statements was this: It is not very easy to say anything forward-looking regarding interest rate decisions, but the statement that ‘we expect support from demand for disinflation at this point’ created an association in my mind: In the coming period, the burden of reducing inflation will be borne by wage earners!”

THE BUSINESS WORLD'S COMPLAINTS ABOUT FINANCING AND HIGH INTEREST RATES

Regarding the business world's serious grievances about access to financing and complaints about high interest rates, Durusoy stated:
“Preventing inflation does not happen only by suppressing demand. Private consumption expenditure is just one of these parameters. On the other hand, steps are needed to increase supply, but the real sector has been expressing that it is experiencing very serious difficulties in accessing financing for a long time due to high interest rates. This is putting significant pressure on SMEs. Erdoğan seemed to give the good news about this yesterday. It seems this will come to the agenda again in the KGF (Credit Guarantee Fund).”

HIGH FOOD INFLATION

Drawing attention to Turkey's high food inflation and reminding that the high level of food inflation was mentioned in the Inflation Report, Durusoy also answered the questions, ‘What will the new Wholesale Market Law bring?’ and ‘Will it increase food inflation?’
Emphasizing that Turkey ranks first in food inflation among OECD countries, Durusoy said that the share of food in expenditure is very high and that inflation is felt at a higher rate than what is announced.

WHAT DOES THE NEW WHOLESALE MARKET LAW BRING? WILL IT BE A SOLUTION?

Touching upon the new Wholesale Market Law, Durusoy noted that there was a Wholesale Market Law that came into effect in 2012, and that there would be a reshaping of the law in order to control opportunists and hoarders, and added:
“We observe that radical changes will be made in the trade of vegetables and fruits. It seems that steps may be taken regarding the protection of both the producer and the consumer through production planning and the wholesale market law. Permissions regarding the establishment of wholesale markets will be transferred from municipalities to the Ministry of Trade. If you ask, ‘Will these be enough to prevent food inflation?’ that is where there is a huge question mark. The most fundamental problem in food inflation is the costs incurred.”

RAISE RATE FOR RETIREES… WILL THERE BE AN INTERIM RAISE FOR THE MINIMUM WAGE?

Prof. Dr. Serap Durusoy also shared her views on the raise rate to be given to retirees with the inflation data to be announced in July and whether there will be an interim raise for the minimum wage.
Stating that she does not think a second raise will be made for the minimum wage, Durusoy said, “I do not think an improvement we expect will come, citing fiscal discipline as an excuse.”

‘WHY ARE THESE SACRIFICES EXPECTED FROM WAGE EARNERS?’

Economist Prof. Durusoy concluded her words as follows: “We desire a tight fiscal policy to accompany monetary policy so that we can get rid of this inflation as soon as possible, but we must also ask how much fiscal discipline is actually being achieved and why these sacrifices are expected from wage earners!”

News Source: 12punto