Despite the conflict in the Ukraine, 2022 will most certainly be remembered as the year of inflation. Prices have increased by about 9% in both the United States and the European Union after decades of inflation below 5%, with supply shocks to the energy and food industries accounting for the majority of the increase — in addition to quantitative easing.
However, while the 9% is still bad for the economies that have enjoyed years of 2% inflation or lower, it is nowhere as catastrophic as the inflation that is currently straining the Turkish economy.
Year-over-year inflation in Turkey is now officially estimated to be at 80%, but unofficial data suggests real inflation may have reached 140% as early as April.
Many Turkish residents have turned to cryptocurrency in an attempt to survive the economic disaster. Despite what some people may expect from an undemocratic nation, Turkey is far from being an unwelcoming place for crypto. In fact, the country has one of the highest crypto ownership rates across the globe.
August saw an 80.2% increase in the official consumer price index for Turkey over the previous month, in comparison to an already impressive 79.6% in July.
This marks both the highest rate ever observed during President Recep Tayyip Erdoan’s nearly 20-year leadership and the first time official inflation has exceeded 80% since 1998.
In Turkey, where Erdoan refused to raise interest rates to a level that may potentially restrain price increases, lax monetary policy is usually held responsible for the country’s out-of-control inflation.
Despite this, the government predicts that inflation will start to decline by the year’s end.
“Inflation will continue to slow down in the coming months. High inflation will be driven from these countries and will never come back,” tweeted Turkey’s finance minister Nureddin Nebati.
Whatever the future holds, regular Turks are now feeling the effects of inflation, which has been happening for a while. Its data on cryptocurrency ownership makes this clear; according to Statista’s figures, 20% of the population owned or had held cryptocurrencies in 2019, and that number increased to 25% in 2021.
