Prof. Dr. Kenneth Rogoff Speaks About Turkey's Inflation

Former IMF Economist, Harvard University Faculty Member Prof. Dr. Kenneth Rogoff evaluated that Turkey would not be able to solve the rising inflation without a serious interest rate hike.

prof. Dr. Kenneth Rogoff, "What strategy should Turkey follow in its fight against inflation?" He answered the question with these words:

"At this point, it is very difficult for Turkey to bring inflation down without a serious interest rate hike. Controlling inflation will indeed be painful, as interest rates are not raised sooner and credibility is damaged by the repeated dismissals of central bankers. Turkey may be heading for a worse economic crisis than it did two decades ago, but despite the war, the global growth and interest rate environment is still favorable enough that there is still time to prevent the economy from making a hard landing."

When the successful economist was asked about the effects of the Russia-Ukraine war on Turkey, Prof. Dr. Rogoff said, "When the erratic recovery after the pandemic is combined with the expectation of an increase in interest rates in the USA, the probability of an increase in financial crises in developing countries is very high in the next two years. A debt default, a banking crisis, or both are possible. Developing economies and low-income countries are most under pressure.

Due to the intense political influence that undermines the independence of the central bank, Turkey was already on the watch list before Ukraine. The threat is even greater now, due to the increasing risk of recession in Europe, the uncertainty created by the war, and Turkey's key trading partners at risk.