Speaking at the meeting where the results of ISO's "Türkiye's Top 500 Industrial Enterprises" survey were announced, Bahçıvan pointed out that despite the contribution of the industrial sector to inflation, the pressure on inflation continued due to the resistance in other areas, especially in the services sector.
“Core goods inflation declined to 20.3%”
Stating that they continue to believe in the Medium Term Program (MTP), Bahçıvan reminded that inflation in core goods decreased from 53% in 2023 to 20.3% in April. Noting that services inflation decreased from 90% to 55% in the same period, Bahçıvan pointed out that the difference is still high. “While the contribution of industry to inflation has decreased, sectors such as services continue to put pressure on total inflation,” Bahçıvan stated.
“High interest rate policy hits industry”
Bahçıvan stated that the high interest rate policy applied against inflation increased credit costs and this negatively affected the industrial sector, which needs financing the most. Reminding that loan interest rates are at 55-60%, Bahçıvan added, “We should evaluate the real interest rate not through the CPI, but through the inflation of basic goods, which is the industry's own inflation. In this case, the real interest rate is almost 40 points.”
“We are paying for a burden we do not deserve”
Emphasizing that industrialists are struggling with high interest rates at a rate much lower than the inflation they create, Bahçıvan warned that this situation could create a supply problem for production. "We are paying the price of a high inflation rate that we do not deserve and that is not caused by us. Industry is the sector that needs the most credit for investment, working capital and stocks. We are doing our duty more than enough," he stated.
“The negative wind continued in the first 5 months of 2024”
Responding to questions about the increase in the number of loss-making companies, Bahçıvan stated that the negative conditions of last year continued in the first five months of 2024. Stating that they are in contact with the government, Bahçıvan emphasized that the industry is paying an increasing price. "Financial stability is important, but the treatment is heavy. Our hope is to complete this process without much damage." he stated.
“Industrialists were sensitive to the wage increase”
Answering a question about the high wage increases in the ISO 500 data, Bahçıvan stated that the industrial sector is sensitive to employee welfare. Last year, it was stated that EYT-induced compensations were effective, but this year, despite the absence of such a situation, wage increases continued.
The VAT burden reached TRY 85 billion
Another dimension of the financing problems experienced by industrialists was the VAT burden. According to ISO 500 data, the amount of VAT carried forward by industrialists increased by 26.9% to approximately TRY 85 billion. Bahçıvan described this burden as “the industrialists' lending to the state with zero interest and infinite maturity”. He added that VAT carried forward during periods of high inflation poses a serious cash flow problem for companies.
Drawing attention to the role of the industrial sector in the Turkish economy, Bahçıvan said that they will continue to contribute to the MTP targets and will continue to express their expectations for the solution of the problems faced by industrialists.
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