A step in the right direction
Should have been done 5 years ago, a return to conventional economics to get ahead of the problem.
Turkiye could have been at 1 trillion nominal GDP at least by now. 250 billion in production was essentially squandered away for no reason and this will compound in the opportunity cost.
Unfortunately for many (developing) countries, GDP is also a very "1st world" oriented reference frame as it helps focus and capture lot of final consumption basis (and all surveying related to this)
Gross Output (GO) is arguably lot better measure for developing countries as it looks into and values supply side provision and elasticity lot more (i.e surveys lot more things upstream and in macro-format)....and developing countries should really be focused there as much as possible as the imperative before consumption (which really only matters once you have achieved large downstream wealth and wealth spread of note).
Capturing gross output in GDP (essentially double counting) is likely some part of reason China's GDP is inflated past what it actually is (compared to how developed countries measure GDP strictly)....and they compounded this problem further by their real estate investment on top....and then suppressing even their top level attempted reformers regarding this like Wen Jiabao and Li Keqiang (and their factions in the CCP apparatus and bureaucracy) more recently.
i.e There is balance to be had here (i.e developing sound measurement of both GDP and Gross Output side by side to compare) by much more institutional transparency and credibility from all countries, but unfortunately consumption-based GDP is be all end all promoted by western institutions as hold over from 20th century. Its not calibrating so well in 21st century even for themselves as their demographics age and debt burdens increase drastically.
The real estate focus in Turkiye (which drove lot of the unconventional economics of the Erdogan admin w.r.t promotion of low interest cheap credit no matter the inflation downstream).... rather than investing in supply side (which needs proper conventional basis w.r.t price signalling feedback into the central bank w.r.t the main investment sources in the world) combined with the overall GDP-centric basis the developing world has at large has really costed Turkiye a bunch in last 5 - 10 years.
The interest rate increase is welcome return to more solid footing, but lot more needs to be done in steady follow up to re-calibrate Turkish economy ship to the winds and currents out there....otherwise it simply patching one hole in the sail and working around the edges rather than taking the issues at hand squarely and concretely....and squandering of potential (i.e where you could have been) will continue and compound.
“We have moved to a transparent, rule-based and rational monetary policy.” They say and look into the eyes of the nation and defend the wall of 27 TL.
In the middle of the night, someone is diving in the name of certain people and collecting cheap dollars.
Tourism season is over, September has arrived.
Now where will they find it and sell it?
