Mahfi Eğilmez comments on IMF's inflation and wage increase report: 'We would increase social tension'

Former Treasury Undersecretary, academic, and author Dr. Mahfi Eğilmez made assessments regarding the IMF's Turkey report. While noting that the report praises the steps taken since June 2023, Eğilmez stated that it also suggests taking tighter measures. 

Mahfi Eğilmez brought the following questions to the agenda regarding the IMF's suggestion that “wage increases should be based on future expected inflation rather than past inflation”:

* But who experienced this past inflation? Hasn't the wage earner constantly fallen behind in the face of the ever-increasing cost of living? Isn't it necessary to pay them compensation for the past?

IMF'S DUTIES ARE LIMITED TO THE ECONOMY

In his assessment regarding the IMF's mandate, Mahfi Hoca commented, “The IMF's duty is, of course, not to make suggestions regarding the country's social and political structure. Its duties are limited to the economy. Therefore, there is a world of difference between the IMF's structural adjustment and the structural reforms I propose.” 

In his social media message, Mahfi Eğilmez continued as follows, stating: “Take whatever measures you want in the economy, permanent solutions can only be achieved by acting within a correct social, political, and economic framework.”

'THE IMF WON'T SAY IT, SO LET US SAY IT'

* By not increasing wages in line with inflation, we only increase social tension. You cannot fight inflation by giving low raises to wage earners who are struggling with poverty, instead of catching and taxing the undeclared assets of people who have not paid their taxes, have gone off the books, have added the income obtained this way to their wealth, and display this as if it were a skill with luxury cars, houses, and goods. 

Mahfi Hoca concluded his assessment by saying, “The IMF cannot say these things, so let us say them.”  

The section on wages in the IMF's Turkey report is as follows:

* Inflation inertia, which is still high, needs to be addressed. Setting prices, wages, and other contracts (such as rents) annually and based on forward-looking inflation is key to resetting expectations and maintaining competitiveness.

* Once relative prices are adjusted, backward-looking indexation should be eliminated, and prices managed by the public sector should be aligned with production and maintenance costs.

News Source: 12punto