Well respected economist Steve Hanke, professor at Johns Hopkins University and Director of the Troubled Currencies Project at Cato Institute, has called out Turkey's official inflation rate of 21.31% and estimates it to be closer to 85%.
On Twitter, the economist said that the "puppets" of President Reccep Tayyip Erdoğan (RTE) in the Central Bank of the Republic of Turkey (TCMB) "report Turkey's official November inflation at 21.31%."
"This number is complete rubbish. Using high-frequency data & PPP principles, I measure Turkey’s inflation at 84.87%/yr today, over 4x the official rate. More daily dishonesty from RTE & TCMB," Hanke added.
Pres. Erdogan's TCMB puppets report #Turkey's official November inflation at 21.31%/yr. This number is complete rubbish. Using high-frequency data & PPP principles, I measure Turkey’s #inflation at 84.87%/yr today, over 4x the official rate. More daily dishonesty from RTE & TCMB. pic.twitter.com/IyTMm4UrrV
— Steve Hanke (@steve_hanke) December 4, 2021
Meanwhile, the Turkish lira has lost more than 45 percent of its value against the United States dollar this year.
November witnessed an all-out crash, with the Turkish currency losing nearly 30 percent of its value against the dollar.
The lira’s recent troubles were triggered after the country’s central bank cut interest rates to 15 percent on November 18. That rate cut was the third since September.
Mainstream economics holds that lower interest rates lead to higher inflation because when money is cheaper to borrow, it loses its value relative to other currencies, and encourages consumers to spend more and businesses to produce more.
Erdoğan disagrees and insists that lower interest rates fight inflation.
Despite the lira’s crash, he shows no signs of changing his position.