Erdogan Blames War’s Aftershocks for Rising Global Inflation
The war in Ukraine, now well into its third year, has fundamentally rewired global commodity flows. Wheat, sunflower oil, natural gas, and fertilizer — all critical inputs for everyday life — remain structurally more expensive than pre-war levels. Even as headline inflation figures have moderated in some Western economies, the underlying cost structure for households and businesses has not returned to where it was before February 2022. The cumulative damage to purchasing power is still being felt from Istanbul to Berlin.
For Turkey, where domestic inflation ran at extreme levels through 2022 and 2023 before orthodox monetary tightening took hold, Erdogan’s framing carries both political and economic weight. It signals that the government views current price pressures as partly beyond domestic control — a message aimed at voters and investors alike. Whether global tailwinds ease further or reverse course will matter enormously for the Central Bank’s rate path in the second half of 2025.
💬 Levent KAYIRA Commentary
Ekonomik Gündem Analysis: Erdogan’s war-aftershocks framing is politically convenient, but there’s real substance behind it. Global food prices are still 20-25% above 2021 levels on a structural basis. Energy costs, despite softening from 2022 peaks, remain elevated and volatile. For Turkey — which imports nearly all of its energy and a significant share of industrial inputs — this is not just rhetoric. Every $10 move in oil translates directly into the current account deficit and, ultimately, into the lira’s pressure points.
From my years managing portfolios through volatile cycles at Koçbank and Garanti, I’ve seen how external inflation shocks can derail even well-executed domestic stabilization programs. Turkey’s TCMB has done the heavy lifting since mid-2023, raising rates aggressively to restore credibility. But if global commodity inflation re-accelerates — driven by new geopolitical flare-ups or a weaker dollar cycle — that work can be partially undone faster than markets expect.
The practical implication for Turkish investors right now: don’t assume the inflation fight is won just because monthly CPI prints are declining. Watch oil, watch wheat, watch the Fed. If global inflation stays sticky, TCMB’s room to cut rates in late 2025 narrows significantly — and that means borrowing costs stay high for small businesses and mortgage holders longer than most are pricing in.
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