Inflation is currently a global issue. Today, let’s look at Turkey, where inflation is a big problem.
Inflation in Turkey has been rising sharply since last autumn when the lira plunged after the Turkish central bank began a monetary easing cycle. The latest reading topped 73.2%, the highest in decades.
The problem is mainly transport and food
The cost of transport and food in Turkey has risen by more than 90% in the last year, forcing many families to severely cut back on even basic living needs.
Of course, both of these areas are not just a problem for Turkey, but rising food and fuel prices are a global issue at the moment. However, Turkey is among the countries that are more vulnerable to these problems due to the state of its economy.
An interesting perspective on the management of the economy
Turkish President Recep Tayyip Erdoğan has long opposed raising interest rates despite rising inflation. This is due to the gradual depreciation of the domestic currency and the declining purchasing power of the Turkish people.
Even last year, according to sources, Erdoğan ordered the central bank to repeatedly cut borrowing rates, and the moment the central bank chief disagreed with the move, he was fired. In this way, the central bank has had 4 governors in the last few years.
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Economic analysts expect that inflation in Turkey will now only get worse. This would mean a very serious situation for the Turkish people, who would sink deeper and deeper into poverty at an accelerating rate.