Turkish Inflation Jumps to Nearly 59%, More Than Expected 

A teller uses a machine to count Turkish lira banknotes at a foreign exchange office in Ankara on July 20, 2023. (AFP)
A teller uses a machine to count Turkish lira banknotes at a foreign exchange office in Ankara on July 20, 2023. (AFP)
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Turkish Inflation Jumps to Nearly 59%, More Than Expected 

A teller uses a machine to count Turkish lira banknotes at a foreign exchange office in Ankara on July 20, 2023. (AFP)
A teller uses a machine to count Turkish lira banknotes at a foreign exchange office in Ankara on July 20, 2023. (AFP)

Türkiye’s annual inflation rate surged to a higher-than-expected 58.94% in August, official data showed on Monday, rising for a second month after a steep fall in the lira currency and recent tax increases.

Month-on-month, consumer price inflation was 9.09%, easing slightly from 9.49% a month earlier. Price rises in transportation drove the monthly measure higher, while price increases for hotels, cafes and restaurants drove the annual measure.

Finance Minister Mehmet Simsek - who has spear-headed a summer policy U-turn meant to rein in prices - said the fight against inflation would take time and patience was needed in the transition period.

"We will do whatever is necessary (monetary tightening, credit policy and income policies) to bring inflation under control and then lower it," he said on the social media site X, formerly known as Twitter.

"We are absolutely determined to fight inflation."

In a Reuters poll, annual inflation was predicted to be 55.9% with monthly inflation seen at 7.0%. In July, the annual figure was 47.83%.

President Recep Tayyip Erdogan's aggressive policy of interest rate cuts set off a currency crisis in late 2021, and sent inflation soaring to a 24-year peak of 85.51% last October.

Since an election runoff in late May this year, the lira has shed 25% of its value as authorities loosened their grip on the exchange rate as part of Erdogan's U-turn toward more orthodox economic policies, including rate rises.

The currency slipped slightly after the price data to 26.78 versus the dollar by 0724 GMT.

The domestic producer price index was up 5.89% month-on-month in August for an annual rise of 49.41%, according to the data from the Turkish Statistical Institute.



Saudi Arabia's Digital Advertising Boom: Addressing Economic Leakage, Boosting Local Content

A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
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Saudi Arabia's Digital Advertising Boom: Addressing Economic Leakage, Boosting Local Content

A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
A digital advertising event recently held in Riyadh (Asharq Al-Awsat)

Saudi Arabia’s digital advertising sector is experiencing rapid growth, but a significant portion of its revenues is leaking to foreign platforms. To maximize the impact on the national economy, experts are calling for strategies to curb this outflow and redirect it to local channels.

The importance of retaining digital ad revenues lies in the substantial size of this market. It is estimated that approximately $1 billion in ad spent is lost annually to foreign platforms, representing a considerable loss to Saudi Arabia’s economy.

Dr. Ebada Al-Abbad, CEO of Marketing and Communications at Tadafuq, a Saudi digital advertising network, told Asharq Al-Awsat that the problem stems from the fact that although advertisers, products, and audiences are often local, the largest share of financial gains goes to foreign platforms. He estimated that 70-80% of the $1.5 billion spent on digital advertising in Saudi Arabia in 2022 went to global platforms such as Google and Facebook. This results in the national economy losing nearly $1 billion annually from this sector alone.

Al-Abbad noted that government agencies in Saudi Arabia also contribute to the outflow. He explained that public sector spending on digital advertising, intended to raise awareness among citizens and residents, frequently ends up on foreign platforms. Government spending makes up about 20-25% of the total digital ad market in the Kingdom, meaning hundreds of millions of riyals leave the country annually, weakening the local digital economy.

Al-Abbad argues that Saudi Arabia needs strong local digital ad networks to keep this revenue within the national economy. These networks would help create jobs, drive innovation, and promote cultural diversity in digital content. Developing local platforms would also enhance Saudi Arabia’s digital sovereignty by ensuring that data remains within the country and is not controlled by foreign entities.

Moreover, local networks would reduce dependence on international platforms, ensuring that the economic benefits of digital advertising remain in the Kingdom, he said, stressing that this would align with Saudi Arabia’s broader Vision 2030 goals, which emphasize building a robust, diversified economy driven by local industries and digital transformation.

Globally, the digital advertising sector is growing rapidly. In 2022, worldwide spending on digital ads reached $602 billion, and it is projected to hit $876 billion by 2026. In the Middle East and North Africa (MENA) region, the digital ad market grew to $5.9 billion in 2022, with Saudi Arabia’s market accounting for over $1.5 billion.

In other countries, the digital ad sector plays a crucial role in boosting national economies. For example, in the United States, the digital advertising industry contributed $460 billion to the GDP in 2021, about 2.1% of the total. In the UK, the sector accounted for 1.8% of GDP in 2022. This shows how important digital advertising can be in driving economic growth.

One of the key challenges facing Saudi Arabia’s digital ad sector is the dominance of global platforms like Google and Facebook, which control 60% of the global digital ad market, Al-Abbad told Asharq Al-Awsat. This dominance results in a significant outflow of revenue and allows these platforms to control digital data and content. He warned that this could undermine Saudi Arabia’s national sovereignty over its digital economy.

To counter this, he emphasized that Saudi Arabia needs to build competitive local networks that can retain a larger share of the market. This will not only keep more revenue in the country but also strengthen the Kingdom’s control over its digital data and content.