Turkey’s state-run statistical agency is fiddling inflation data to help hide price increases and replacing officials who refuse to do so, a high-level employee at the institution said, according to Ahmet Takan, a columnist for the Korkusuz newspaper.
When the Turkish Statistical Institute (TÜİK) notices alarming inflation numbers for items such as clothing and stationery, they ask officials at regional offices to alter the data or delay reporting it to future months, the official said, according to Takan, who is a former press adviser at the prime ministry.
“If high inflation is noticed, they immediately call the regional manager and ask for correction or whatever items have increased too much, they send the items with an Excel file and ask for correction. This is illegal,” the official said. “For example, they may say, “don’t register stationary increases, let them enter them in September”. The increase that may occur in two months is reduced to a single month.”
Turkey’s consumer price inflation accelerated to 18.95 percent in July from 17.5 percent the previous month. The rate stands immediately below the central bank’s benchmark interest rate of 19 percent. Last week, President Recep Tayyip Erdoğan, who is demanding that interest rates are lowered, signaled that he expected inflation to slow in August.
Some regional chiefs of TÜİK rejected verbal requests to alter figures for clothing prices for July, demanding an official letter. Instead, TÜİK sent emails instructing them to do so, the official said. The employees who rejected the measure were moved to other positions by decree, according to the official.
Takan said he had a document in his possession listing the Aug. 6 replacement of nine regional heads of TÜİK, including for the regions of Bursa, Edirne, Kayseri, Konya, Manisa, Nevşehir, Van, Trabzon and Zonguldak. The instructions were issued by Umut Serhat, a deputy chief of the institution, he said, listing the document number as 18118070-903.02.01-23.
The people were demoted to positions as experts or statisticians, Takan said.
“Now work is being done on how to reduce producer prices,” the official said. “Some of these prices are a problem because the companies report it themselves.” Prices for rent are still compiled using old, less desirable apartments that do not fully meet reporting requirements and so average price increases are kept low, according to the official, who gave an example of price manipulation in the capital Ankara.
Erdoğan has fired or moved dozens of officials at TÜİK by presidential decree. On Aug. 6, he hired three people as deputy heads of the institution, including Umut Serhat Idman.
TÜİK is due to publish August inflation data on Sept. 3. The central bank’s Monetary Policy Committee will meet to decide on interest rates on Thursday.
Hakan Kara, a former chief economist at the central bank, said he was writing a technical assessment about whether monetary policy in Turkey was tight, but after reading about Takan’s interview with the TÜİK official he had lost all enthusiasm.
(This story was updated with alleged demotions in seventh paragraph.)