8 Nov 2021
Erdogan’s Popularity at risk with Economy Boom, High Inflation and Poverty Crisis
The Index Today
Turkey’s President Tayyip Erdogan fight to bring down interest rates comes at the risk of widening wealth gaps between social classes and downfall of the booming economy. Working-class supporters may feel the brunt of interest rates as surging inflation continues all across the world.
Erdogan has expressed hope that low interest rates could help speed up economic recovery and put him on track for the 2023 upcoming elections. However, despite previous economic growth which was supported through credit facilities, the present scenario for Erdogan may become prove more challenging.
Investors are flocking to buy property in Istanbul as the property market sees a drop in prices and provides a strong hedge against the local currency. New property developments are seen coming up fast across the capital but housing insecurity remains a leading issue. Turkey reported increase in home prices by 13.2% for the third quarter last month.
On the other hand, poverty has hit a new record over the past decade with covid making the situation difficult for locals. Roughly 1.6 million people in Turkey fall below the minimum threshold of $5.5 set by the World Bank. According to Hacer Foggo, the founder of Deep Poverty Network, poverty has gone up to shocking levels as many families are unable to afford basic necessities to survive.
He said, “I’ve been working in the field for the last 20 years, and for the first time I am seeing poverty turning into hunger and people asking for food.”
Erdogan is pushing his agenda of economic growth and prosperity to gain the support of his people for the upcoming elections. The Lira went down 20% against the dollar and is among the worst-performing emerging market currencies for the year. On the other hand, inflation soared for its fifth consecutive month closing in on 20%.