Who Can Improve the Economy in Turkiye?

Who Can Improve the Economy in Turkiye?

By Turkiye Raporu 

December 2022

The economy remained the most important issue on Turkiye’s agenda in November 2022. As winter has arrived, rising energy prices continue to strain society’s budget. While, on the other hand, there is the ever-rising inflation.

 In October 2022, annual inflation was 85.21% according to TURKSTAT data and 185.34% according to ENAG data. In this climate, there was a development for the national economy in November.

The Central Bank of Turkiye announced its interest rate decision for November. The Monetary Policy Committee of the Central Bank decided to cut the interest rate by 150 basis points from 10.50%. The policy interest rate went down to 9%. The policy rate in Turkiye fell to single digits for the first time since August 2020. In a statement, the Central Bank announced that interest rate cuts have ended. The Board stated that the interest rate cut cycle is over and disinflationary policies will be pursued in the coming period. The Central Bank had started the interest rate cut cycle in September 2021.

Following this policy, the CBRT cut the policy rate by 100 basis points for five consecutive months. During this period, according to TURKSTAT data, inflation rose from 19.58% in September 2021 to 19.89% in October, 21.31% in November, 36.08% in December and 48.69% in January. Throughout 2022, the inflation rate did not decline at all.

At the beginning of 2022, the Central Bank kept the policy rate unchanged for a long time with the start of the new year and then made a surprise decision to cut interest rates by 100 basis points again in August 2022. In this way, it restarted the interest rate cut cycle. The CBRT, which cut interest rates in the following months, announced the end of the interest rate cut cycle in November 2022 when the policy rate fell to single digits, as expected by the markets, and signaled that it would start anti-inflation policies. But in this process, does the sharp decline in the purchasing power of the society indicate that the institutions are late in fighting inflation? Which leader does the society think will pursue policies that will solve economic problems?

In this economic climate, we asked respondents which political leader they think will be the best to tackle Turkiye’s economic problems. From May 2020 to April 2021, when we asked this question for the first time, support for President Recep Tayyip Erdoğan was declining. In August 2022 and November 2022, 28% of respondents chose Erdoğan. Yet a significant portion of respondents believe that no leader can overcome economic problems.

In November 2022, the share of those who think that President Erdoğan can solve the economic problems is the same as the share who think that no leader can solve them (28%). Since May 2020, we have been asking respondents which leader can solve economic problems. In May 2020, the rate of respondents who answered President Erdoğan was the highest at 40%. However, the percentage of respondents who answered Erdoğan dropped to 26% in April 2021. In November 2022, 28% of respondents think that Erdoğan will overcome economic problems.

The rate of those who think that no leader will be able to solve the economic problems in November 2022 increased by 5 points from 23% in August to 28%. Compared to August 2022 results, those who think that CHP leader Kemal Kılıçdaroğlu can solve the economic problems in November 2022 decreased by 1 point, while those who think that Ankara Metropolitan Mayor Mansur Yavaş can solve the economic problems decreased by 3 points. The rate of those who answered President Erdoğan, IYI Party leader Meral Akşener and DEVA Party leader Ali Babacan remained the same.

The rate of those who think that a leader of the National Alliance can solve economic problems is 25%.

One out of every four respondents thinks that a candidate from the National Alliance can solve the economic problems.

In other words, the rate of respondents who answered Kemal Kılıçdaroğlu, Meral Akşener, Ekrem İmamoğlu and Mansur Yavaş is 25%.

In November, the rate of those who think that a candidate other than the leaders listed above can solve the economic problems is 8%. The most frequently mentioned names in this group are Muharrem İnce and Ümit Özdağ.

The rate of those who think that a leader of the People’s Alliance can solve the economy is 29%.

According to the November 2022 results, 28% of the respondents think that President Erdoğan can solve the economic problems, while 1% of the respondents think that Devlet Bahçeli will overcome the economic crisis. The rate of respondents who answered the question with Selahattin Demirtaş was 6%.