Economist: Turkey's economic wreckage surpasses imagination

Turkey's economic crisis is not limited to high inflation and current account deficits, but rather a result of a complex set of issues plaguing various sectors, renowned Turkish economist Mahfi Egilmez said, adding that the implementation of the right economic policies will require significant sacrifices, including dire austerity measures.

In a detailed analysis of Turkey’s current economy on his web site mahfiegilmez.com, Egilmez highlighted the enormity of the economic wreckage, stating that it surpasses our imagination, and shared his predictions on how long it would take for the country to recover.

While he acknowledged that the correct economic policies could lead to recovery in two to three years, he also outlined the challenges that lie ahead, including the heavy burden of election promises and expenditures, the increasing budget deficit, and the effects of the earthquake.

"Given this huge wreckage, we can see that the correct economic policy to be implemented cannot yield results simply by increasing interest rates by a few points or providing 3-5 billion dollars in external funding. Unfortunately, it will require renewed sacrifice from all segments of society. Turkey is considered one of the riskiest countries in the world. So foreign investors are not coming. Even those who will lend are hesitant, despite a 10% interest rate in dollars. We are faced with a complete dilemma: Either we will experience a serious austerity period or we will not be able to fix this wreckage. This is the situation as I see it," Egilmez said.

Regarding how those in power and those vying for power can make such promises, Eğilmez recalled an ironical quote from Thomas Sowell that he included in his book, "Easy Economics": "The first lesson of economics is scarcity. According to this, everything used to meet demands is scarce. The first lesson in politics is to ignore the first lesson of economics."