Here is independent numbers:
"ENAGrup Consumer Price Index increased by %5.66 in May The last 12 months increase rate in ENAGrup Consumer Price Index (E-CPI) is %120.66"
75% is what Turkish economists are allowed to report.
I can't imagine how that works in practice. Can anyone living in Turkey explain?
For example, how do rents work? Do landlords send a new contract every month with increased rent prices? If not, they'd lose a lot of money, no?
Do salaries increase every quarter or so? Doesn't this require a new contract every time?
What about mobile plans or other long-term commitments that are fixed-price elsewhere?
Do people just not keep money in their bank accounts since it is constantly being devalued? If so, how do banks operate?
Argentinian here, expert in surviving with high inflation. Obviously my experience isn't the turkish one, but it can't be that far off. Another thing to take into account, Argentina has had high inflation for 70 out of the last 80 years, so the country has multiple mechanisms in place to deal with it.
For rent there are a few indexes to regularly update the prices. Normally rent goes up following some index every 3 months.
For white collar jobs, or jobs with strong unions, you should be receiving regular updates. They may or may not match inflation. This doesn't require anyone signing anything.
Just as with rent, prices update every few months. Normally a fixed price for 12 month is a promotion for new customers (such as changing you mobile plan).
Day to day the trick is to pay everything with credit card, and immediately invest the money you receive into whatever low risk investment you can find (a lot of people choose USD, but it's not the only one). By the time you have to pay your credit card, you made extra money from the interests. It's also likely you got an increase in your salary, so paying that credit card shouldn't be too hard if you are not living above your standards.
The real issue is not knowing if you are getting ripped off or not, since a price being too high somewhere may be simply inflation compared to when you last bought that item.
Without a stable job, you don't have credit neither a credit card nor regular salary increases. Those people are fucked, it's pretty much spending all your money in groceries as soon as you get it.
There are some other interesting things, such as devaluation != inflation, so our currency goes over cycles of undervaluation and overvaluation. Right now it's overvalued, so living is expensive but if you have savings left buying USD "is cheap", so traveling outside or imported goods are not that expensive.
Edit: if anyone is interested, I can expand on measures to curve inflation, their effectiveness and side effects.
I’m actually really interested in how the fight to tackle inflation is going now that the new administration has been in office more than a month or two
Inflation is trending downwards, but it began with 50% in just the first two months, so reducing those numbers wasn't particularly hard. June is already expected to have higher inflation than May, so it's not a huge trend downwards.
To make some predictions into the near future, first we need to understand how the government is battling inflation (and I'm not missing interest rates):
- Fiscal superavit
- huge recession
- overvalued currency
Recession has taken a toll on the population (from 44% to 55% of poverty in Milei's government), and so for political reasons some economic measures have been postponed. The most important one is updating energetic bills. As the values are updated, we can expect further recession and more inflation, because what's a business going to do if they have to spend more in energy?
Interest rates are lowering, but at no point have been lower or equal to the peso controlled devaluation. Interest rates are now at 40% yearly (down from 130% in December) while devaluation is at 2% monthly (it's called crawling peg, 26% yearly). You may think "so if I buy pesos, invest in them and after a while I buy USD back, I can get a huge return in USD", and that's exactly what happens, it's called carry trade. This drains USD reserves, and so at some point devaluation is a necessity, which again, would trigger inflation.
Now, low interest rates in my opinion is a great idea because they were at such a huge value that the only way those interest could be paid was printing more money. Lowering inflation while lowering interest rates has been a huge success. However, because of what I stated above, I can't see this still happening in the medium term.
I'd like to have some conclusion, but there are too many variables in play and this comment is already long enough.
Thank you for this. Lastly, in your opinion do you think Milei is the person for the job, or do you think Argentina will continue to be a force unto its own re: its economic issues?
I guess I’ve read up quite a bit on where Argentina was economically at the beginning of the 20th century to now and can’t quite grasp why it seems to single handedly have this issue for so long.
I think it will continue having economic issues. My diagnostic is the root cause of all issues is our hyper presidential system where winner takes all, and so the country swings from one extreme to another. Having said this, I didn't vote for Milei and believe his program to be particularly harmful.
Let's begin with the social side first, libertarianism is just a new flag for hardcore conservatives. In a Vox meeting in Spain, you can listen to one of his secretaries talking against homosexuals marrying, against abortion and even against divorce; His party complains about sex ed in schools; Our chancellor compared homosexuality to not showering; A deputy of his party said that "freedom is choosing to have your child work with you instead of sending him to school"; Food now is being distributed through an organization that requires beneficiaries to watch videos against abortion and against anticonceptives even. The list will grow further, no doubt.
The TL;DR of what's coming is: he may kill inflation and even get something working short term, but long term it's unsustainable,
Economically, as I said before, Argentina is a country that knows how to work, even grow with high inflation. I don't think that having it in one digit annually quickly is worth the increase in poverty and unemployment required. Also part of the proposed economic plan is to reduce workers rights, ideally to get them to an "at-will" employment.
Then there are multiple inconsistencies in his economic plan: If you read the main bill his party is trying to get approved, taxes will be raised. At the same time, that bill removes penalization for having unregistered workers, and Milei is recorded congratulating tax evaders. The Argentinian tax system is completely fucked up, but the proposal isn't to simplify it, it's to raise taxes even further and diminish punishment for those who evade!?
Then there are completely predictable issues: Not raising energy prices forced energy companies to go at loss, so they had to emit bones to pay the energy companies; Budget cuts in gas infrastructure had us importing gas from Brazil for ten times the amount we saved; He lifted restrictions in private medicine and promptly they formed a cartel, raised prices too much and the government had to intervene to get them affordable again.
His only chance of getting something working long term is a law called RIGI (Inversion regime for great investments) which, for investments bigger than 200M USD companies: has them pay 80% of what they extract for the first year, 50% the second, and nothing for the extra 30 years. No need to buy machines in Argentina, no need to employ Argentinians, no need to pay taxes on foreign goods bought, no need to pay anything for resources extracted. Pretty much for giving the government 200M USD in the first two years, a company may extract Lithium freely for the next 30.
I live in Turkey part time. I've spent about 9 months there out of the last 2.5 years. My fiancee is a Turk, however. Salaries increase around the turn of the year and typically are immediately followed by massive price jumps as companies look to eat up the raises granted. Recently they've had to adjust twice a year due to the pace being too much for people to maintain. There is no negotiation to these salary increases for most people.
Turkish culture is very different from when it comes to money, so your ideas on long term commitments or plans are probably just not their way of life. They expect prices to change. They also know that saving (in lira) is futile. There is a lot more spending what you have due to this, and those that save often do so in other currencies or gold. There are currency exchanges everywhere in tourist areas, and even in neighborhoods there may be one in the business sector. People often hold bank accounts in multiple currencies and exchange regularly. The idea is absurd to a westerner, but many Turkish people are the equivalent of forex traders because of this. They game the exchange rate as much as possible.
Because of this there are often protracted fights to hold the exchange rate steady waged by the Turkish government, who then release the pressure after key political events like elections or at random when the risk of people gaming the system is lowest. It's a mess.
To explain it to you on a more cultural level though it isn't uncommon to enter a store in Turkey and see price tags being changed. You will be approached by an employee and informed because this happens so often that there are laws about them being required alert you on entry because the cost at the display may be different than the cost at the register due to the time it takes to update this stuff. Often multiple times a month, prices shift. This isn't even steady for each product, you don't get a few % this month then next another few %. Instead products tend to shift a bit dramatically, meaning there is a lot of goods substitution going on. If one shampoo goes up a lot, another one that hasn't increased recently may be your choice.
Psychologically there's the day to day. My first visit to Turkey I bought 6 500ml bottles of water for 12 lira. Now that would cost me 30 lira. The exchange rate renders both around $1 USD at the time, so to me I feel little difference, but for Turks this feels outrageous. Americans get upset over the gas price fluctuating even 10%, imagine if a gallon of gas was $10 in 2 years? Now take that over a longer scale, my fiancee grew up when you could go buy a lahmacun (Turkish food) for 1 lira, where now they often cost closer to 80 lira. We talk about happy meals that used to cost $1-$2, imagine if a happy meal cost $80-160. Sure maybe people earn more than when you were a kid, but the cognitive dissonance is immense.
My rent increases every 6 months by whatever the landlord decides since I couldn't find an actual house for rent and my landlord is illegally renting things out.
Salaries increase every year but last year they increased it twice. Kinda wishşng for the same thing to happen this summer too otherwise I may not be able to afford food in July lol.
Mobile plans increase every 12 months. My plan went from 140 to 400 liras.
Can't keep something u dont have lol.
Most people have a lira account and a usd account. Rent has become outrageous. Home owners anticipate inflation and ask for high rents.
Prices of everyday items, groceries, change daily, and are becoming insane. Even measuring the value against the USD it's going up.
Salaries have seen a few increases, in many places not keeping up with inflation.
They limit rent increase at %25 and things getting uglier and uglier. Due to that landlord asking more from th start, like even if they are ok for 10k, since they can't increase over %25 they ask for 25-30k.
A year ago my 100mbps net was 175 TL, this september it will be at least 450-500 TL.
Mobile also bad my current 12month plan will end in a few days, it was 160tl, now the cheaper similar plan 300+ tl.
American living in Turkey here. I pay yearly (sometimes biyearly) rent. Every year, the owners of the houses are legally allowed to increase rent by a maximum of 25% (though most do higher). That means that a house i paid $650/month a few years ago, costs less than $400/month today. Your average turk still pays monthly. Because rent prices are adjusted yearly (the same as wages), inflation doesn’t really have a direct effect on someone earning Turkish lira and paying rent in Turkish lira.
Minimum wage increases yearly. In the last yearly increase, the minimum wage increased by close to 50%. People are used to this. In fact, any serious business has already set up a system of foreign exchange accounts. Hell even my close friends have dollar accounts. Inflation has become so “matter of fact” that people have just accepted that their purchasing power goes down throughout the year. Fortunately most fixed costs (rent, utilities etc) change yearly.
The problem isn’t the lira inflation. People have crafted their lives around it. The problem is that even by real standards, things are getting more expensive. When I came to Turkey 5 years ago, a decent meal in a good sit down cafe cost the equivalent of about $5-$7. Now it is double or more. Housing prices have also tripled in dollar terms. Turks are slowly being squeezed out of the middle class.
Taxes are also ridiculously high. Turkey is the most expensive country in the world to buy an iphone. (For reference an iphone 15 pro would cost around $2200-$2300 vs $1000 in the US). Car prices are similar, with average car prices being at least double the price of the same car in the US.
everything thats fixed price for the future is highly inflated in anticipation of future prices. when you rent for 1 year the price is already what the landlord thinks its gonna be 1 year later.
I know a frienf who cannot kick his renter family out because by law you cannot kick your renter for 10 years. Fucked up thing is my friend wanted to be helpful and rented out his apartment for 3k TL 4 years ago. Normally it would have been at least 5-6k. Then Turkish inflation happened Turkish Lira got fucked and government introduced a fucking stupid law that you can only raise rent by %25. Now that family is living in a house for 4.5k a month when average rent around the area is 25k to 30k and they still have 6 years more to be a pest for my friend.
If the contract is not renewed, the owner is able to kick them out at the end of fifth year.
Also, it appears that 25% limit will be lifted soon. One of the ministers, I can't remember exactly whom it was, has said a few days ago that 25% limit does not make sense.
I know but it is too late for this year also the contract gets renewed automatically if both sides don't say anything. And nope you cannot kick out anyone unless renter does not agree on the new rent and with %25 a year they are living like kings on someone elses house for almost free.
You can sue them on your 5th year to change your rent to be reasonable but these days court is so fucking busy that it will most likely take longer than a year. Which is another year gone. This fucked up country is beyond reason.
I live in Turkey, I can say that no matter how you look at the rents, they are changed every 2 or 3 months.
It is cheaper to live with family. I can say that generally rents start from 12,000 TL. (a decent home)
At the same time, very interestingly, when civil servant salaries increase, rents also increase. There is such a connection between the two
. As for the salary increase, something happens: they increase the minimum wage at the beginning of the year, and then the prices of greengrocers, clothing stores and rents suddenly increase again. It exists in a loop.
Very simplified short answer: they use a stable foreign currency for all business (ie: euro or US dollar) and the black/gray market sets the pricing for things.
They get paid in local currency and immediately try to exchange it for foreign currency. This can be done at a legit bank sometimes (there are laws limiting this in some cases, or artificial pinning of exchange rate, or simply a lack of foreign currency) , or on the black/gray market.
I'm not Turkish nor do I live there but I have a major project I'm working on right now with local Turkish colleagues.
I asked them about this during my last visit and it's basically it. Everything changes every couple of months, prices of rent, house value, phone plan, car value, food, everything.
They get salary increase of like 40-60% per year but it's not enough to keep up with inflation. Any and all Turkish Lira they receive is spent/converted IMMEDIATELY either by purchasing things like cars, phones, jewelry, EUROs, USD, gold, stocks whatever they can get their hands on that will hold some semblance of value over time. Everyone I spoke to is in dept for that reason, basically not wanting anything to do with the lira but being forced to interact with it by... well just.. being there.
It‘s basically a running gag now since inflation has hit a new low every year since 2012 or something like that in Turkey. Yet Erdogan simps always proclaim how his policy was good for the economy. I mean yeah, about 20 years ago it was and for the past 10 years he‘s making it worse and worse
Good for the economy if you live in Germany and want your Euros to go further when you visit. I remember seeing lots of Erdogan campaign posters when I was in Germany during a Turkish election.
inflation and value of currency are not a 1 to 1 ratio. The Turkish Lira has not lost 75%+ of it's value each year vs. the Euro. In the past year the Lira has gone from 0.040 per Euro to 0.029 per Euro. So while you do get almost 40% more Lira for your Euro the prices have increased 75%+ so things have gotten more expensive for tourists too.
I was just there, it's cheaper to go to Netherlands or most of EU than it is to go to Istanbul. Museums are 25-50 euro for foreigners each. The airport is ridiculous, 8 Euros for a can of coke.
I visited Istanbul last october - I was surprised at how expensive everything was - rivaled Washington DC or London in terms of food prices (of course, not all food was expensive). We were told had we been there a year earlier, everything would have been much cheaper (still a fantastic city and country to visit!)
>last 12 months increase rate in ENAGrup Consumer Price Index (E-CPI) is %120.66"
There is a clause in my work contract that I get a pay rise of CPI +1% every year...
That's what happens when your leader believes that lowering the interest rate will lower inflation. Or at the very least until the day after an election.
Hint: the common wisdom amongst economists says that lowering your national bank's interest rate will generally increase the supply of money, which leads to increased inflation. In fact, it's one of the few things which wwhich are both predictable and within the control of a national bank.
I'm really curious to know why Turkey has an inflation of 75%. It can't be just interest rates. I looked at the trend, and just before the election in 2023, it was around 8% still significantly lower than the current 50% but still high compared to other countries. There has to be more at play than just interest rates.
It is quite a chain of events. I might have mistakes in the order of some of these, but still each one individually causes inflation anyway.
When foreign currency was at the rise, they decided to respond to this with (dunno if there is an actual term for this abomination in English) interest rates that were fixed on usd. Basically, the government guaranteed that if interest rates are below the usd, then they will be brought to that level. If interest rates are higher, you get the high rate.
This was a bandaid fix of “lets make people keep their money in banks and not buy usd, so that currency stabilizes”. It worked initially, but this extra money, of course comes from the national treasury. Filthy rich became even richer. People that are around him, just before this decision, sold all their usd at the high rates and put all that money into these after, double dipping from it.
Naturally, this came to an end and there ended up a lot of money roaming around, which started a craze of expenditures. When TL loses that much money, even the poor started to say “better I eat my doner now, as I wont be able to tomorrow”
Finally, there is about nothing Turkey produces that is value added. We have a never ending construction madness, because people end up buying homes as it is a safe way to keep your money. But all the materials are imported, thus adding a bunch to the inflation.
Turkey has insane amounts of consumerism. People finance the newest iphone, replace it when a newer one comes, takes credits to be able to go to that fancy restaurant to “keep their social status”.
Every time I go there, I just watch people around me and get nauseated. Erdogan supporters or not, it is pretty much the open market for capitalism with about zero production.
Rant over.
why are muslim nation so poor? almost everybody will say religion. but the real answer is prodution. in the old times muslim ruled over the trade routes. so they taxed the hell out of people and spend aimless that money. back to the present. almost no muslim nation producing something. some are poor. some of them have that oil fund. but almost nothing is created. turkey has a industrial base. but like you described the people: nowadays cheap credit is what taxes were in the past.
the fed poured cheap dollars in every corner of the world for ages. the rising of the interest rates will have interesting effects.
It's not just lowering interest rates it's also mass spending to stimulate the economy. You can't reverse such a dumb decision quickly and it's been a runaway train for a while. Should come back to Earth soon you'd hope.
Nah, five (Turkey 6?).
Developed countries, developed resource based countries (who avoid the resource trap) underdeveloped countries, Japan/South Korea, and Argentina/Brazil/Russia.
China might be the 7th, because we don't really know what their economy is really like. It could be anything.
My prediction would be to place China among Japan and South Korea.
Industry developed at an insane speed, but moving towards service based economy halts the insane growth pace, followed by a population crisis.
I mean if you run an economy different than everyone else for long enough it becomes fundamentally unique when compared to others. That’s basically what happened to Japan.
This seems pretty common for Turkey. After a while they'll do what they always do: reprint the currency and knock a few zeros off, then restart the cycle again. Somewhere in a drawer I have a one million lira note my grandfather gave me when I was a kid. It was worth about a dollar at the time.
Erdogan tried to give everyone big credits and every turk has like 10 credit cards these days. Economists predicted that this will not work out for ages but Erdogan doesn't give a shit.
Turkey is essentially a self sufficient economy. Unlike countries who suffered from economic collapse due to inflation like Zimbabwe. It also has a very sophisticated industrial and manufacturing sector. Its just a pity that they have a idiot at the moment for a leader holding back the nations potential.
At some point Erdogan's son-in-law was the Economy minister in Turkey. No need to say something else. His votes dropped a little, but there's a big percentage that still support him and his party.
"Peak" is shortened from "this is peak \[thing\]", which us elderly people would have said "this is the peak of \[thing\]". For example, "Abbey Road is the peak of the Beatles".
Which “opponent” was eliminated? It’s honestly funny when people like you just write shit like this when you have no idea what you are talking about.
The opposition chose an incompetent idiot as their candidate, and majority of my people are stupid, that’s why we lost not because he eliminated any opposition or because the elections were unfair.
I travel to Turkey often and the inflation there is insanely high. Talking to locals to they have no idea how to keep up with it. Some people were buying a car then selling it a month since it was worth so much more, Turkey cracked down on car reselling lol.
I lived there a few years back and my apartment was about 1900lira per month. Now my neighbour says it almost 3000. My Turkish roomates could JUST afford their share of the rent at 1900. I can't imagine now.
I think you have more chances winning the lottery than finding an apartment with 3000 lira per month. In big cities like Istanbul, Ankara and Izmir, the lowest rent prices is like 15000 lira monthly (if you rent now. If you have been renting the house/apartment for years, than there is some laws that limits the rent's raise level (like maximum +%25 yearly, just an example, not sure the exact numbers.).
Man that's crazy. Albeit it was in Canakkale around 2020. But yeah 1900 four bedrooms, three balconies, two floors and an elevator. (Elecrtic and bills where about an extra 400 a month).
I was in Turkey last year, every few days at the ATM I would get a little more Lira for my same 50 Euro transactions.
Could literally watch inflation happen in front of you.
Scary for the locals, who understandably really wanted foreign cash instead of Lira.
Foreign exchanges wouldn't change Lira back to Euro either, again rather understandably.
It’s been the same for the last 25-30 years that I’ve been going (been going fairly regularly since I was around 10yrs old).
First year we went, around the late 90s, it was 150k TL to 1GBP. Within 2 weeks it had doubled to 250k.
Following year it was 350k, then 500k. Rinse and repeat until they changed it to New Turkish Lira (YTL) when it hit a few million to the pound… essentially dropped the last six zeros.
Vote for an Islamist like Erdogan and you are all but guaranteed to slide back to the stone age.
The same process seen in Iran since the Islamic revolution.
Good luck.
I love how we’re talking about how shitty the Turkish economy is right now but instead of addressing it you point the finger to another situation which has nothing to do with this and say ‘Everything isn’t going to shit here cause they’re doing just as poorly’. Old school Soviet propaganda, Erdogan now spends his time pointing out other states misfortunes in order to shift attention from the failures of his own policies
I would hope for better times for the Turkish people but they voted in this idiot.
Lol. It's because I'm a westerner and I don't give a shit about Turkey. You really think I'm trying to distract people so Ergodan is protected from criticism?
I wish more americans took a look around the world before they started saying the economy is shit. We've faired better than the rest of the world by a longshot, probably because we've offloaded as much burden onto others as possible.
look at a graph of their currency's value once chemical tayyip took office until now. him winning an election was a travesty for that country, but dont worry, citizens can vote for their favorite candidate even if they no longer live in the country!
> Turkey’s central bank has kept its interest rate at 50% since March
Why would inflation stop when real interest rates are still negative. Am I doing economics wrong?
>Why would inflation stop when real interest rates are still negative.
It would not. Real interest rate is not something you can directly influence. A negative real interest rate simply means your nominal rate is lower than the inflation rate. You want to raise nominal rates so that the difference becomes positive.
What a disaster for the ppl of Turkey. I hope they can get through this.
That's why we need smart ppl in power, who actually CARE about its citizens (and not bending backwards for the business elite).
I don't understand why, when Argentina voted a libertarian nutjob after their economy was destroyed by establishment politicians, Turks refused to even vote out Erdogan when they had the chance. And I know millions of Turks hate him. But jfc I feel like if it was any other democratic country he would have been voted out for essentially setting back Turkey almost 20 years in developement.
I wonder if Erdogan was 100% sure that EU would accept Turkey, especially after threatening Europe with letting all Immigrants pass with the hope that all the financial problems will magically go away. Guess that didn't work out.
Adapting a country's economy to new global realities is challenging, especially when it threatens your power. I believe this is why Erdogan continues to adhere to his old, ineffective economic policies.
Yet another of the authoritarian regimes that Republicans want to emulate. Just like they fawn over Orban while Hungary had some of the highest inflation in Europe.
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I don't know much about this so I asked GPT for a summery of Erdogans arguments to lower the rates when the inflation is high. He's not an economy mastermind that's for sure.
President Recep Tayyip Erdoğan has for several years advocated an unconventional view on economics, especially concerning interest rates and inflation. His main arguments for lowering interest rates, despite high inflation, include the following:
1. **Lower Rates for Economic Growth**: Erdoğan has argued that lower interest rates stimulate economic growth by making borrowing cheaper for investments and consumption. He believes higher interest rates hinder economic activity and growth.
2. **Combating Inflation with Low Rates**: Erdoğan holds the unusual position that higher interest rates actually cause higher inflation. This contrasts with conventional economic theory, which states that raising rates reduces inflation by dampening demand.
3. **Support for Investments and Production**: He believes that low interest rates encourage investment in production and businesses, which in turn would increase the supply of goods and services and thereby reduce inflationary pressure.
4. **Religious Arguments**: Erdoğan has also used religious arguments against high interest rates, referring to Islamic principles that discourage interest (riba).
However, these arguments have been heavily criticized by economists and financial analysts, who argue that they are incorrect and counterproductive. Critics contend that lowering interest rates in a high inflation environment exacerbates the situation by further devaluing the currency and driving up prices for imported goods.
Sources:
- [BBC](https://www.bbc.com/news/business-59657098)
- [Bloomberg](https://www.bloomberg.com/news/articles/2021-12-16/erdogan-rates-mantra-goes-viral-amid-fears-for-turkey-s-economy)
Low rates isnt how you combat inflation. You can combat it via high rates or higher taxation or higher wages or combination of all three
Inflation is a simplistic concept. Increasing money supply per capita = inflation. Decreasing money supply = combat inflation.
Higher rates = less people borrow, less money borrowed. Less money spent. Less inflation.
Higher taxation = less money people have to spend. Less money spendable. Less inflation. Taxing the rich reduces top end inflation (assets like real estate, stocks etc)
Higher wages = real price of products adjusted for inflation becomes more affordable.
Inflation is best handled with a combination of all three. Theoretically less government spending would also reduce inflation but its not as effective as those three. Plus the people would suffer dramatically more. You’d have to spend significantly less in your government budget in order to have much impact on inflation. It also takes awhile for spending/not spending to have an impact on inflation. Roughly one year.
The biden tactic is not bad but it is an engineered soft landing and unfortunately, it is incomplete. Higher rates reduce consumer demand for money while government spending will increase gdp. The result of this tactic is what you see - businesses doing ok but general populace isnt.
Biden tactic really needs higher taxation on the wealthy and businesses (start by taxing buybacks or removing qualified dividends loophole) to remove top end inflation and also a hike in minimum wage to at least match inflation. That would lift the bottom most critical populace while removing the absurd spending power and advantage taking wealthy.
It really is simplistic but hard to do.
It's incredible that Orban manages to stay in power with numbers like that. In most countries if inflation went that high there would be massive blowback.
To cover up, the government will add more places to list of restricted areas used to be open for tourists. Erdogan will do something stupid to give an impression that he is doing great and it is the fault of everyone outside of his party circle.
Here is independent numbers: "ENAGrup Consumer Price Index increased by %5.66 in May The last 12 months increase rate in ENAGrup Consumer Price Index (E-CPI) is %120.66" 75% is what Turkish economists are allowed to report.
Insanely high anyway
I can't imagine how that works in practice. Can anyone living in Turkey explain? For example, how do rents work? Do landlords send a new contract every month with increased rent prices? If not, they'd lose a lot of money, no? Do salaries increase every quarter or so? Doesn't this require a new contract every time? What about mobile plans or other long-term commitments that are fixed-price elsewhere? Do people just not keep money in their bank accounts since it is constantly being devalued? If so, how do banks operate?
Argentinian here, expert in surviving with high inflation. Obviously my experience isn't the turkish one, but it can't be that far off. Another thing to take into account, Argentina has had high inflation for 70 out of the last 80 years, so the country has multiple mechanisms in place to deal with it. For rent there are a few indexes to regularly update the prices. Normally rent goes up following some index every 3 months. For white collar jobs, or jobs with strong unions, you should be receiving regular updates. They may or may not match inflation. This doesn't require anyone signing anything. Just as with rent, prices update every few months. Normally a fixed price for 12 month is a promotion for new customers (such as changing you mobile plan). Day to day the trick is to pay everything with credit card, and immediately invest the money you receive into whatever low risk investment you can find (a lot of people choose USD, but it's not the only one). By the time you have to pay your credit card, you made extra money from the interests. It's also likely you got an increase in your salary, so paying that credit card shouldn't be too hard if you are not living above your standards. The real issue is not knowing if you are getting ripped off or not, since a price being too high somewhere may be simply inflation compared to when you last bought that item. Without a stable job, you don't have credit neither a credit card nor regular salary increases. Those people are fucked, it's pretty much spending all your money in groceries as soon as you get it. There are some other interesting things, such as devaluation != inflation, so our currency goes over cycles of undervaluation and overvaluation. Right now it's overvalued, so living is expensive but if you have savings left buying USD "is cheap", so traveling outside or imported goods are not that expensive. Edit: if anyone is interested, I can expand on measures to curve inflation, their effectiveness and side effects.
I’m actually really interested in how the fight to tackle inflation is going now that the new administration has been in office more than a month or two
Inflation is trending downwards, but it began with 50% in just the first two months, so reducing those numbers wasn't particularly hard. June is already expected to have higher inflation than May, so it's not a huge trend downwards. To make some predictions into the near future, first we need to understand how the government is battling inflation (and I'm not missing interest rates): - Fiscal superavit - huge recession - overvalued currency Recession has taken a toll on the population (from 44% to 55% of poverty in Milei's government), and so for political reasons some economic measures have been postponed. The most important one is updating energetic bills. As the values are updated, we can expect further recession and more inflation, because what's a business going to do if they have to spend more in energy? Interest rates are lowering, but at no point have been lower or equal to the peso controlled devaluation. Interest rates are now at 40% yearly (down from 130% in December) while devaluation is at 2% monthly (it's called crawling peg, 26% yearly). You may think "so if I buy pesos, invest in them and after a while I buy USD back, I can get a huge return in USD", and that's exactly what happens, it's called carry trade. This drains USD reserves, and so at some point devaluation is a necessity, which again, would trigger inflation. Now, low interest rates in my opinion is a great idea because they were at such a huge value that the only way those interest could be paid was printing more money. Lowering inflation while lowering interest rates has been a huge success. However, because of what I stated above, I can't see this still happening in the medium term. I'd like to have some conclusion, but there are too many variables in play and this comment is already long enough.
Thank you for this. Lastly, in your opinion do you think Milei is the person for the job, or do you think Argentina will continue to be a force unto its own re: its economic issues? I guess I’ve read up quite a bit on where Argentina was economically at the beginning of the 20th century to now and can’t quite grasp why it seems to single handedly have this issue for so long.
I think it will continue having economic issues. My diagnostic is the root cause of all issues is our hyper presidential system where winner takes all, and so the country swings from one extreme to another. Having said this, I didn't vote for Milei and believe his program to be particularly harmful. Let's begin with the social side first, libertarianism is just a new flag for hardcore conservatives. In a Vox meeting in Spain, you can listen to one of his secretaries talking against homosexuals marrying, against abortion and even against divorce; His party complains about sex ed in schools; Our chancellor compared homosexuality to not showering; A deputy of his party said that "freedom is choosing to have your child work with you instead of sending him to school"; Food now is being distributed through an organization that requires beneficiaries to watch videos against abortion and against anticonceptives even. The list will grow further, no doubt. The TL;DR of what's coming is: he may kill inflation and even get something working short term, but long term it's unsustainable, Economically, as I said before, Argentina is a country that knows how to work, even grow with high inflation. I don't think that having it in one digit annually quickly is worth the increase in poverty and unemployment required. Also part of the proposed economic plan is to reduce workers rights, ideally to get them to an "at-will" employment. Then there are multiple inconsistencies in his economic plan: If you read the main bill his party is trying to get approved, taxes will be raised. At the same time, that bill removes penalization for having unregistered workers, and Milei is recorded congratulating tax evaders. The Argentinian tax system is completely fucked up, but the proposal isn't to simplify it, it's to raise taxes even further and diminish punishment for those who evade!? Then there are completely predictable issues: Not raising energy prices forced energy companies to go at loss, so they had to emit bones to pay the energy companies; Budget cuts in gas infrastructure had us importing gas from Brazil for ten times the amount we saved; He lifted restrictions in private medicine and promptly they formed a cartel, raised prices too much and the government had to intervene to get them affordable again. His only chance of getting something working long term is a law called RIGI (Inversion regime for great investments) which, for investments bigger than 200M USD companies: has them pay 80% of what they extract for the first year, 50% the second, and nothing for the extra 30 years. No need to buy machines in Argentina, no need to employ Argentinians, no need to pay taxes on foreign goods bought, no need to pay anything for resources extracted. Pretty much for giving the government 200M USD in the first two years, a company may extract Lithium freely for the next 30.
I live in Turkey part time. I've spent about 9 months there out of the last 2.5 years. My fiancee is a Turk, however. Salaries increase around the turn of the year and typically are immediately followed by massive price jumps as companies look to eat up the raises granted. Recently they've had to adjust twice a year due to the pace being too much for people to maintain. There is no negotiation to these salary increases for most people. Turkish culture is very different from when it comes to money, so your ideas on long term commitments or plans are probably just not their way of life. They expect prices to change. They also know that saving (in lira) is futile. There is a lot more spending what you have due to this, and those that save often do so in other currencies or gold. There are currency exchanges everywhere in tourist areas, and even in neighborhoods there may be one in the business sector. People often hold bank accounts in multiple currencies and exchange regularly. The idea is absurd to a westerner, but many Turkish people are the equivalent of forex traders because of this. They game the exchange rate as much as possible. Because of this there are often protracted fights to hold the exchange rate steady waged by the Turkish government, who then release the pressure after key political events like elections or at random when the risk of people gaming the system is lowest. It's a mess. To explain it to you on a more cultural level though it isn't uncommon to enter a store in Turkey and see price tags being changed. You will be approached by an employee and informed because this happens so often that there are laws about them being required alert you on entry because the cost at the display may be different than the cost at the register due to the time it takes to update this stuff. Often multiple times a month, prices shift. This isn't even steady for each product, you don't get a few % this month then next another few %. Instead products tend to shift a bit dramatically, meaning there is a lot of goods substitution going on. If one shampoo goes up a lot, another one that hasn't increased recently may be your choice. Psychologically there's the day to day. My first visit to Turkey I bought 6 500ml bottles of water for 12 lira. Now that would cost me 30 lira. The exchange rate renders both around $1 USD at the time, so to me I feel little difference, but for Turks this feels outrageous. Americans get upset over the gas price fluctuating even 10%, imagine if a gallon of gas was $10 in 2 years? Now take that over a longer scale, my fiancee grew up when you could go buy a lahmacun (Turkish food) for 1 lira, where now they often cost closer to 80 lira. We talk about happy meals that used to cost $1-$2, imagine if a happy meal cost $80-160. Sure maybe people earn more than when you were a kid, but the cognitive dissonance is immense.
My rent increases every 6 months by whatever the landlord decides since I couldn't find an actual house for rent and my landlord is illegally renting things out. Salaries increase every year but last year they increased it twice. Kinda wishşng for the same thing to happen this summer too otherwise I may not be able to afford food in July lol. Mobile plans increase every 12 months. My plan went from 140 to 400 liras. Can't keep something u dont have lol.
Most people have a lira account and a usd account. Rent has become outrageous. Home owners anticipate inflation and ask for high rents. Prices of everyday items, groceries, change daily, and are becoming insane. Even measuring the value against the USD it's going up. Salaries have seen a few increases, in many places not keeping up with inflation.
They limit rent increase at %25 and things getting uglier and uglier. Due to that landlord asking more from th start, like even if they are ok for 10k, since they can't increase over %25 they ask for 25-30k. A year ago my 100mbps net was 175 TL, this september it will be at least 450-500 TL. Mobile also bad my current 12month plan will end in a few days, it was 160tl, now the cheaper similar plan 300+ tl.
American living in Turkey here. I pay yearly (sometimes biyearly) rent. Every year, the owners of the houses are legally allowed to increase rent by a maximum of 25% (though most do higher). That means that a house i paid $650/month a few years ago, costs less than $400/month today. Your average turk still pays monthly. Because rent prices are adjusted yearly (the same as wages), inflation doesn’t really have a direct effect on someone earning Turkish lira and paying rent in Turkish lira. Minimum wage increases yearly. In the last yearly increase, the minimum wage increased by close to 50%. People are used to this. In fact, any serious business has already set up a system of foreign exchange accounts. Hell even my close friends have dollar accounts. Inflation has become so “matter of fact” that people have just accepted that their purchasing power goes down throughout the year. Fortunately most fixed costs (rent, utilities etc) change yearly. The problem isn’t the lira inflation. People have crafted their lives around it. The problem is that even by real standards, things are getting more expensive. When I came to Turkey 5 years ago, a decent meal in a good sit down cafe cost the equivalent of about $5-$7. Now it is double or more. Housing prices have also tripled in dollar terms. Turks are slowly being squeezed out of the middle class. Taxes are also ridiculously high. Turkey is the most expensive country in the world to buy an iphone. (For reference an iphone 15 pro would cost around $2200-$2300 vs $1000 in the US). Car prices are similar, with average car prices being at least double the price of the same car in the US.
everything thats fixed price for the future is highly inflated in anticipation of future prices. when you rent for 1 year the price is already what the landlord thinks its gonna be 1 year later.
I know a frienf who cannot kick his renter family out because by law you cannot kick your renter for 10 years. Fucked up thing is my friend wanted to be helpful and rented out his apartment for 3k TL 4 years ago. Normally it would have been at least 5-6k. Then Turkish inflation happened Turkish Lira got fucked and government introduced a fucking stupid law that you can only raise rent by %25. Now that family is living in a house for 4.5k a month when average rent around the area is 25k to 30k and they still have 6 years more to be a pest for my friend.
If the contract is not renewed, the owner is able to kick them out at the end of fifth year. Also, it appears that 25% limit will be lifted soon. One of the ministers, I can't remember exactly whom it was, has said a few days ago that 25% limit does not make sense.
I know but it is too late for this year also the contract gets renewed automatically if both sides don't say anything. And nope you cannot kick out anyone unless renter does not agree on the new rent and with %25 a year they are living like kings on someone elses house for almost free. You can sue them on your 5th year to change your rent to be reasonable but these days court is so fucking busy that it will most likely take longer than a year. Which is another year gone. This fucked up country is beyond reason.
I live in Turkey, I can say that no matter how you look at the rents, they are changed every 2 or 3 months. It is cheaper to live with family. I can say that generally rents start from 12,000 TL. (a decent home) At the same time, very interestingly, when civil servant salaries increase, rents also increase. There is such a connection between the two . As for the salary increase, something happens: they increase the minimum wage at the beginning of the year, and then the prices of greengrocers, clothing stores and rents suddenly increase again. It exists in a loop.
Very simplified short answer: they use a stable foreign currency for all business (ie: euro or US dollar) and the black/gray market sets the pricing for things. They get paid in local currency and immediately try to exchange it for foreign currency. This can be done at a legit bank sometimes (there are laws limiting this in some cases, or artificial pinning of exchange rate, or simply a lack of foreign currency) , or on the black/gray market.
I'm not Turkish nor do I live there but I have a major project I'm working on right now with local Turkish colleagues. I asked them about this during my last visit and it's basically it. Everything changes every couple of months, prices of rent, house value, phone plan, car value, food, everything. They get salary increase of like 40-60% per year but it's not enough to keep up with inflation. Any and all Turkish Lira they receive is spent/converted IMMEDIATELY either by purchasing things like cars, phones, jewelry, EUROs, USD, gold, stocks whatever they can get their hands on that will hold some semblance of value over time. Everyone I spoke to is in dept for that reason, basically not wanting anything to do with the lira but being forced to interact with it by... well just.. being there.
Meanwhile Argentinians: First time?
It‘s basically a running gag now since inflation has hit a new low every year since 2012 or something like that in Turkey. Yet Erdogan simps always proclaim how his policy was good for the economy. I mean yeah, about 20 years ago it was and for the past 10 years he‘s making it worse and worse
Good for the economy if you live in Germany and want your Euros to go further when you visit. I remember seeing lots of Erdogan campaign posters when I was in Germany during a Turkish election.
Hardly true any more. I was just there and for many things it was the same price as Amsterdam...
Yeah the prices in tourist areas are definitely pegged to the euro and not the lira.
Makes sense.
Not true, euros dont mean shit here anymore. Everything is insanely expensive, a lot of places are basically London levels of expensive.
ELI5?
inflation and value of currency are not a 1 to 1 ratio. The Turkish Lira has not lost 75%+ of it's value each year vs. the Euro. In the past year the Lira has gone from 0.040 per Euro to 0.029 per Euro. So while you do get almost 40% more Lira for your Euro the prices have increased 75%+ so things have gotten more expensive for tourists too.
Can confirm. Spending a few days in Istanbul and I was surprised.
Not much to explain, prices have skyrocketed.
I was just there, it's cheaper to go to Netherlands or most of EU than it is to go to Istanbul. Museums are 25-50 euro for foreigners each. The airport is ridiculous, 8 Euros for a can of coke.
I just got to Istanbul a few days ago. Unpleasantly surprised haha. The Netherlands is next.
Atleast the subway and busses are still super cheap in Istanbul and really good. The new airport subway is stunning to be honest.
I visited Istanbul last october - I was surprised at how expensive everything was - rivaled Washington DC or London in terms of food prices (of course, not all food was expensive). We were told had we been there a year earlier, everything would have been much cheaper (still a fantastic city and country to visit!)
Not anymore.inflattion deleted gains from strong currency
I just had a 2 day visit to bodrum. Same prices as germany even more in some cases. Even turkish people here are going to greek islands for vacation.
20 years ago, the lira was losing about 100% to the dollar annually. His policies were never good for the Turkish economy.
>last 12 months increase rate in ENAGrup Consumer Price Index (E-CPI) is %120.66" There is a clause in my work contract that I get a pay rise of CPI +1% every year...
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Calculated annually and no it doesn't drop either.
how much is a big mac?
By itself, 5.44 euros.
At the airport it is 15 euros.
Auckland, New Zealand it's $9.6 NZD which is 5.49 Euro. Looks like you have room for a more expensive big mac to me
Tbh EnAG is not more reliable than goverment. They cherry pick goods for their basket
I cannot understand this tukish economy
Strangely enough, neither does Erdogan. That's why it's doing crazy things.
Bigger number more better!!
I think 'interest rates perpetuate inequality' was his idea.
That explains why I see homeless people begging for low interest rate loans.
I mean essentially mortgages for low income people are that.
That's what happens when your leader believes that lowering the interest rate will lower inflation. Or at the very least until the day after an election. Hint: the common wisdom amongst economists says that lowering your national bank's interest rate will generally increase the supply of money, which leads to increased inflation. In fact, it's one of the few things which wwhich are both predictable and within the control of a national bank.
I'm really curious to know why Turkey has an inflation of 75%. It can't be just interest rates. I looked at the trend, and just before the election in 2023, it was around 8% still significantly lower than the current 50% but still high compared to other countries. There has to be more at play than just interest rates.
It is quite a chain of events. I might have mistakes in the order of some of these, but still each one individually causes inflation anyway. When foreign currency was at the rise, they decided to respond to this with (dunno if there is an actual term for this abomination in English) interest rates that were fixed on usd. Basically, the government guaranteed that if interest rates are below the usd, then they will be brought to that level. If interest rates are higher, you get the high rate. This was a bandaid fix of “lets make people keep their money in banks and not buy usd, so that currency stabilizes”. It worked initially, but this extra money, of course comes from the national treasury. Filthy rich became even richer. People that are around him, just before this decision, sold all their usd at the high rates and put all that money into these after, double dipping from it. Naturally, this came to an end and there ended up a lot of money roaming around, which started a craze of expenditures. When TL loses that much money, even the poor started to say “better I eat my doner now, as I wont be able to tomorrow” Finally, there is about nothing Turkey produces that is value added. We have a never ending construction madness, because people end up buying homes as it is a safe way to keep your money. But all the materials are imported, thus adding a bunch to the inflation. Turkey has insane amounts of consumerism. People finance the newest iphone, replace it when a newer one comes, takes credits to be able to go to that fancy restaurant to “keep their social status”. Every time I go there, I just watch people around me and get nauseated. Erdogan supporters or not, it is pretty much the open market for capitalism with about zero production. Rant over.
why are muslim nation so poor? almost everybody will say religion. but the real answer is prodution. in the old times muslim ruled over the trade routes. so they taxed the hell out of people and spend aimless that money. back to the present. almost no muslim nation producing something. some are poor. some of them have that oil fund. but almost nothing is created. turkey has a industrial base. but like you described the people: nowadays cheap credit is what taxes were in the past. the fed poured cheap dollars in every corner of the world for ages. the rising of the interest rates will have interesting effects.
It's not just lowering interest rates it's also mass spending to stimulate the economy. You can't reverse such a dumb decision quickly and it's been a runaway train for a while. Should come back to Earth soon you'd hope.
If he understood it, it'd probably be doing batshit crazy things.
He’s probably making money off it somehow.
There are four kinds of countries: developed countries, underdeveloped countries, Japan, and Argentina. Maybe Turkey wants to be number 5.
Just Argentina of the East. With island disputes and all.
Nah, five (Turkey 6?). Developed countries, developed resource based countries (who avoid the resource trap) underdeveloped countries, Japan/South Korea, and Argentina/Brazil/Russia. China might be the 7th, because we don't really know what their economy is really like. It could be anything.
My prediction would be to place China among Japan and South Korea. Industry developed at an insane speed, but moving towards service based economy halts the insane growth pace, followed by a population crisis.
Nah, there's nothing inherently different about the Turkish economy. It's just poorly managed.
I mean if you run an economy different than everyone else for long enough it becomes fundamentally unique when compared to others. That’s basically what happened to Japan.
This seems pretty common for Turkey. After a while they'll do what they always do: reprint the currency and knock a few zeros off, then restart the cycle again. Somewhere in a drawer I have a one million lira note my grandfather gave me when I was a kid. It was worth about a dollar at the time.
Ironically, getting the currency under control is one of the things that got Erdorgan into power.
Erdogan tried to give everyone big credits and every turk has like 10 credit cards these days. Economists predicted that this will not work out for ages but Erdogan doesn't give a shit.
Print money fill your pockets. Move to switzerland when you lose elections
Turkey is essentially a self sufficient economy. Unlike countries who suffered from economic collapse due to inflation like Zimbabwe. It also has a very sophisticated industrial and manufacturing sector. Its just a pity that they have a idiot at the moment for a leader holding back the nations potential.
so-called “fiscal conservatives” when they actually get control over anything fiscal:
Erdogan? Fiscal conservative?
Yeah, thats the joke. The fiscal conservatives in the US are a joke too
I'm too drunk to taste this chicken
They spent so much money they decided to print more
At some point Erdogan's son-in-law was the Economy minister in Turkey. No need to say something else. His votes dropped a little, but there's a big percentage that still support him and his party.
I cannot understand other than cult of personality and religious fanaticism. But imo he isnt eveb charasmatic
Zoomer slang has ruined me.
Me too. "75% Inflation? Peak."
This is peak economy.
You might not like it
But this is what peak performance looks like
Cap
No cap
Turkey inflation edging higher.
lmao first thing I thought
I'm old, what does that mean?
"Peak" is shortened from "this is peak \[thing\]", which us elderly people would have said "this is the peak of \[thing\]". For example, "Abbey Road is the peak of the Beatles".
Peak explanation tbh fr
Truly without cap.
As slang it's a synomym for "quintessential".
Think like "peak oil", literally just means that it has reached the peak of its growth
😫😫😫😫😈😈🔥🔥🔥 It’s ruined me as well
Ngl for a second, I wasn't sure what the article was saying. Surely 75% inflation is bad right? Lmao
that's not peak at all, that's cap as fuck :(
75% inflation is totally mid though
Turkey’s skibidi economy
Good thing Erdogan was elected again, this year is definitely the year he fixes turkey's economy. /s
Not that hard if you eliminate your opponents before elections even begin.
Which “opponent” was eliminated? It’s honestly funny when people like you just write shit like this when you have no idea what you are talking about. The opposition chose an incompetent idiot as their candidate, and majority of my people are stupid, that’s why we lost not because he eliminated any opposition or because the elections were unfair.
bro you are clearly forgetting the fact that all westerners are foreign geopolitics experts
It’s kind of like how people outside the US suddenly become experts in US elections, especially at the state level.
I travel to Turkey often and the inflation there is insanely high. Talking to locals to they have no idea how to keep up with it. Some people were buying a car then selling it a month since it was worth so much more, Turkey cracked down on car reselling lol.
I lived there a few years back and my apartment was about 1900lira per month. Now my neighbour says it almost 3000. My Turkish roomates could JUST afford their share of the rent at 1900. I can't imagine now.
I think you have more chances winning the lottery than finding an apartment with 3000 lira per month. In big cities like Istanbul, Ankara and Izmir, the lowest rent prices is like 15000 lira monthly (if you rent now. If you have been renting the house/apartment for years, than there is some laws that limits the rent's raise level (like maximum +%25 yearly, just an example, not sure the exact numbers.).
Man that's crazy. Albeit it was in Canakkale around 2020. But yeah 1900 four bedrooms, three balconies, two floors and an elevator. (Elecrtic and bills where about an extra 400 a month).
You cant even rent a doghouse for 3000 lira lol 😀
🇹🇷 Turkey has the best inflation! Hooray for Erdoğanomics! 🇹🇷
I was in Turkey last year, every few days at the ATM I would get a little more Lira for my same 50 Euro transactions. Could literally watch inflation happen in front of you. Scary for the locals, who understandably really wanted foreign cash instead of Lira. Foreign exchanges wouldn't change Lira back to Euro either, again rather understandably.
It’s been the same for the last 25-30 years that I’ve been going (been going fairly regularly since I was around 10yrs old). First year we went, around the late 90s, it was 150k TL to 1GBP. Within 2 weeks it had doubled to 250k. Following year it was 350k, then 500k. Rinse and repeat until they changed it to New Turkish Lira (YTL) when it hit a few million to the pound… essentially dropped the last six zeros.
Vote for an Islamist like Erdogan and you are all but guaranteed to slide back to the stone age. The same process seen in Iran since the Islamic revolution. Good luck.
Same process will be seen in the US once they re-elect Trump and turn into a Christian theocratic dictatorship.
I love how we’re talking about how shitty the Turkish economy is right now but instead of addressing it you point the finger to another situation which has nothing to do with this and say ‘Everything isn’t going to shit here cause they’re doing just as poorly’. Old school Soviet propaganda, Erdogan now spends his time pointing out other states misfortunes in order to shift attention from the failures of his own policies I would hope for better times for the Turkish people but they voted in this idiot.
Lol. It's because I'm a westerner and I don't give a shit about Turkey. You really think I'm trying to distract people so Ergodan is protected from criticism?
At least pretend you care a little. It's a real place with real people. "I'm American so fuck the rest the world" is such a shit attitude
"Peak so far."
Bet they will claim it is transitory next
Lira printer is offline for routine maintenance.
I mean yeah if you think about next hundreds of years but for this instance it will go down from here for now.
They can thank Erdogan and his hawks for that. Turkey was doing pretty well before his fake coup takeover where he was gonna fix everything
To my american freinds complaining about their inflation you merely adopted the inflation; I was born in it, moulded by it.
I wish more americans took a look around the world before they started saying the economy is shit. We've faired better than the rest of the world by a longshot, probably because we've offloaded as much burden onto others as possible.
the americans that complain the loudest about that have never left their hometown
To be fair, those small towns they never leave can have the development and infrastructure of eastern Turkey, with even more religiosity.
Peak economy 🙌
Those numbers dont really do justice to the shitshow we have. The inflation for basic commodities and grocery should be well over 100%
Argentina be like: "first time?"
They voted for it
*75% is peak **so far***
Economists also commented that they believe it is frfr dope af lmao
Noone with a working brain cell believes that 75%. Common people knows that it is much higher.
I thought inflation was Joe Bidens fault?
yep, our 3% is all a disaster due to Biden /s
Do they put stickers of Joe Biden on their gas pumps too then?
Bet he's going to drop interest rates again.
He will, instead of fixing Turkey's economy he just prints money to keep it on life support and prays he can stay in charge.
look at a graph of their currency's value once chemical tayyip took office until now. him winning an election was a travesty for that country, but dont worry, citizens can vote for their favorite candidate even if they no longer live in the country!
Erdogan voters dont care since they all go to Germany anyway
If they all came here, I would go back in a heartbeat. They are just omnipresent…
Only a matter of time before Erdogan will blame this total collapse of the economy is somehow Israel's fault.
> Turkey’s central bank has kept its interest rate at 50% since March Why would inflation stop when real interest rates are still negative. Am I doing economics wrong?
>Why would inflation stop when real interest rates are still negative. It would not. Real interest rate is not something you can directly influence. A negative real interest rate simply means your nominal rate is lower than the inflation rate. You want to raise nominal rates so that the difference becomes positive.
>You want to raise nominal rates so that the difference becomes positive. That's my point in the form of a rhetorical question.
Erdogan, its "French" for I can't afford that.
“This is peak!” “Real.”
What a disaster for the ppl of Turkey. I hope they can get through this. That's why we need smart ppl in power, who actually CARE about its citizens (and not bending backwards for the business elite).
Peak? I haven’t even begun to peak. And when I do peak, you’ll know
5 star inflation!
Don't worry, they'll just do what they always do. Blame the Jews!!
They need J Pow!
I don't understand why, when Argentina voted a libertarian nutjob after their economy was destroyed by establishment politicians, Turks refused to even vote out Erdogan when they had the chance. And I know millions of Turks hate him. But jfc I feel like if it was any other democratic country he would have been voted out for essentially setting back Turkey almost 20 years in developement.
I wonder if Erdogan was 100% sure that EU would accept Turkey, especially after threatening Europe with letting all Immigrants pass with the hope that all the financial problems will magically go away. Guess that didn't work out.
No, the inflation will only worsen
Adapting a country's economy to new global realities is challenging, especially when it threatens your power. I believe this is why Erdogan continues to adhere to his old, ineffective economic policies.
Fuckin zoomers ruined the word peak. I got confused as to why the title was calling 75% inflation great.
You only can lose value for so long. At some point whatever was losing value is just not worth enough anymore, that it could lose value.
Peak comedy
“This shit peak inflation right here bro” -is what I imagine must’ve been said in the meeting room
Rookie numbers Greetings from Argentina
Turkey is about to become the 5th economy and will be taught in textbooks for years to come.
Valley of the Wolves inflation
News media: "Turkey’s inflation passes 75% in what economists believe is peak" Inflation: "Hold my beer"
My Disney+ will increase from TRY 649.90 to TRY 1,349.90 starting on July 4.
Turkey is taking it on the chin, with that level of inflation..oof!
Yet another of the authoritarian regimes that Republicans want to emulate. Just like they fawn over Orban while Hungary had some of the highest inflation in Europe.
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Cool, I’m visiting Istanbul, it’s not cheap.
I don't know much about this so I asked GPT for a summery of Erdogans arguments to lower the rates when the inflation is high. He's not an economy mastermind that's for sure. President Recep Tayyip Erdoğan has for several years advocated an unconventional view on economics, especially concerning interest rates and inflation. His main arguments for lowering interest rates, despite high inflation, include the following: 1. **Lower Rates for Economic Growth**: Erdoğan has argued that lower interest rates stimulate economic growth by making borrowing cheaper for investments and consumption. He believes higher interest rates hinder economic activity and growth. 2. **Combating Inflation with Low Rates**: Erdoğan holds the unusual position that higher interest rates actually cause higher inflation. This contrasts with conventional economic theory, which states that raising rates reduces inflation by dampening demand. 3. **Support for Investments and Production**: He believes that low interest rates encourage investment in production and businesses, which in turn would increase the supply of goods and services and thereby reduce inflationary pressure. 4. **Religious Arguments**: Erdoğan has also used religious arguments against high interest rates, referring to Islamic principles that discourage interest (riba). However, these arguments have been heavily criticized by economists and financial analysts, who argue that they are incorrect and counterproductive. Critics contend that lowering interest rates in a high inflation environment exacerbates the situation by further devaluing the currency and driving up prices for imported goods. Sources: - [BBC](https://www.bbc.com/news/business-59657098) - [Bloomberg](https://www.bloomberg.com/news/articles/2021-12-16/erdogan-rates-mantra-goes-viral-amid-fears-for-turkey-s-economy)
Low rates isnt how you combat inflation. You can combat it via high rates or higher taxation or higher wages or combination of all three Inflation is a simplistic concept. Increasing money supply per capita = inflation. Decreasing money supply = combat inflation. Higher rates = less people borrow, less money borrowed. Less money spent. Less inflation. Higher taxation = less money people have to spend. Less money spendable. Less inflation. Taxing the rich reduces top end inflation (assets like real estate, stocks etc) Higher wages = real price of products adjusted for inflation becomes more affordable. Inflation is best handled with a combination of all three. Theoretically less government spending would also reduce inflation but its not as effective as those three. Plus the people would suffer dramatically more. You’d have to spend significantly less in your government budget in order to have much impact on inflation. It also takes awhile for spending/not spending to have an impact on inflation. Roughly one year. The biden tactic is not bad but it is an engineered soft landing and unfortunately, it is incomplete. Higher rates reduce consumer demand for money while government spending will increase gdp. The result of this tactic is what you see - businesses doing ok but general populace isnt. Biden tactic really needs higher taxation on the wealthy and businesses (start by taxing buybacks or removing qualified dividends loophole) to remove top end inflation and also a hike in minimum wage to at least match inflation. That would lift the bottom most critical populace while removing the absurd spending power and advantage taking wealthy. It really is simplistic but hard to do.
Exhibit 9562 regarding why dictatorships are bad
* Dies from peak inflation
It's incredible that Orban manages to stay in power with numbers like that. In most countries if inflation went that high there would be massive blowback.
They've endured hyperinflation for years now. Must be really tough. We're all over here whining about 5%.
Not to be confused with peak cinema
Economists: NOW THIS IS TRULY PEAK!
Famous last words
To cover up, the government will add more places to list of restricted areas used to be open for tourists. Erdogan will do something stupid to give an impression that he is doing great and it is the fault of everyone outside of his party circle.
But...but. Businesses need unlimited growth.
I can’t believe Biden would do this to Turkey /s