(Bloomberg) -- Turkey’s largest listed discount retailer rejected claims by President Recep Tayyip Erdogan that grocers have been increasing prices while costs remain stable -- a move he says is fueling the fastest pace of inflation in more than two decades.
“We are not the source of price increases we see on the labels,” Galip Aykac, chief operating officer of BIM Birlesik Magazalar AS, told BloombergHT in Istanbul. “Just as exchange offices are not the reason for the increase in exchange rates, and gas stations aren’t the reason for fuel-price increases.”
Price increases reflect rising costs, Aykac said, evident in the spread between consumer prices that are 85.5% higher than a year ago and producer inflation that’s at almost 158%.
Erdogan has frequently blamed grocery chains for increasing prices without a valid reason, while pro-government media has portrayed them as actors in a battle to overthrow the president. The central bank has pointed toward “pricing formations that are not supported by economic fundamentals” in its monthly interest-rate decision statements.
Earlier this month, Erdogan said the government may discuss steps to penalize grocers beside fines for overcharging. On Monday, he said two government ministries were “looking into” price complaints against retail chains.
BIM had almost 11,300 stores across Turkey as of September.
Erdogan, who’s up for re-election next year, has championed an economic model that prioritizes exports, production and employment at the expense of price stability and the currency. The president has pressured the central bank to lower its benchmark interest rate into single digits, a goal it met last week by bringing the key rate to 9%.
A plunge in the lira because of his unconventional polices are among reasons for high inflation.
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