CHP chimes in
The CHP’s economic staff has prepared its own assessment of Turkey’s economy
The Republican People’s Party (CHP) has come out with its own report card on the economy, prepared by the party’s economic staff and presented to CHP leader Kemal Kilicdaroglu, its findings are as follows:
The budget deficit target for end-2019 was announced as TRY 80.6 billion. In the first six months of the year, budget deficit reached TRY 78.6 billion. Thus, the target was practically reached in six months. A breakdown of the budget shows that interest expenditures increased rapidly compared to the previous year, but revenues showed a limited increase because of the economy in crisis.
According to official figures, the number of unemployed increased by 1,116,000 compared to the same period last year to 4,202,000, making the number of unemployed in broader terms 7,755,000. Seasonally-adjusted unemployment indicators have been on the rise for 14 months, going from 10.3 percent in the same period of the previous year to 13.8 percent this year.
Companies going out of business
The statistics on newly-opened and recently-closed announced in June 2019 revealed that a total of 4,779 companies operating in the construction sector, 207 of which are joint stock companies, 959 private and 3,441 of sole proprietorship, were shut down, and increase of 21 percent compared to last year. The dramatic decrease in the number of newly-opened companies reveals that people are refraining from establishing new companies in the sector.
The accumulated reserve fund and reserve for contingencies balance amounted to TRY 46.2 billion as of the end of June 2019. With the enactment of the law, around TRY 40 billion of this amount is expected to be transferred to the Treasury. Although there are some arguments that a monetary expansion of TRY 40 billion will not have an inflationary effect, the reality is that such a move is against monetary tightening, which means printing unbacked money, will have an inflationary effect by expanding the money supply without a loan. This move will mean the monetization of Treasury debts. Such a move gives the impression that a stagflation threat is ahead.