The Turkish Lira crashes on Thursday as the nation reports an annual inflation rate of 70%, the highest in over two decades.
Turkey’s Statistical Institute, TurkStat, assessed the annual inflation rate reached 61.14 per cent in March, which is the highest inflation rate in the last two decades.
Consumer goods, food, utility bills and taxes rose significantly. The prolonged economic crisis and energy shortages due to the War in Ukraine have not helped price stability but made it worse.
During the past month, the electricity price increased by 50 per cent, natural gas prices by 35 per cent, sugar by up to 85 per cent, internet prices by 67 per cent and wheat by 22 per cent.
Experts warned that these increases will result in significant hikes in prices of other products, as was seen in March. Experts and independent researchers believe the official don’t believe the official numbers, saying it does not show market realities, due to the government’s control of the statistics agency.
The question is, how awful does inflation seem for the Eurasian market right now?
Turkey’s Statistical Institute (TSI) said that the country’s annual inflation rate increased to 69.97% in April.
This is also an increase over the previous month’s figure of 61.14%.
The consumer price index (CPI) increased by 7.25% month-over-month, above the consensus prediction of 6%.
Inflation is widespread, with increases in the prices of food, transportation, energy, utilities, housing, and consumer goods and services all contributing to the increase in prices.
On a year-over-year basis, producer prices also surged in April.
The producer pricing index (PPI) increased by 121.82% in April, up from 114.97% in March.
In April, the monthly PPI fell to 7.67%, down from 9.19% the previous month.
The Istanbul Chamber of Industry Manufacturing purchasing managers’ index (PMI) declined for the second consecutive month, falling to 49.2 from the previous month.
Anything with a value less than 50 implies contraction.
This was the lowest PMI number since May 2020, as a result of pricing pressures, slower output, fewer new orders, and a slowdown in the development of export order growth.
Employment increased for the 23rd month in a row.
Foreign currency reserves declined for the second week in a row
The Turkish Lira falling to $65.4 billion in the week ending April 29, from the previous week.
Since the end of February, Turkey’s foreign exchange reserves have not exceeded $70 billion.
Results on vehicle production, industrial output, retail sales, and labor figures will all take place next week, resulting in a data frenzy.
The economic community agrees that although Russia’s invasion of Ukraine has led to rising prices, President Erdogan’s “quite unusual monetary policies” are the real culprit.
Turkey Needs Bitcoin
Michael Saylor, the CEO of MicroStrategy, brought attention to the subject of inflation statistics being inaccurate when he declared, “Inflation data is not reliable.”
“Inflation is a vector. A scalar index can be biased by choosing certain items. Your index assumes human beings don’t need food, energy, or home ownership, nor desire assets such as property, equity, bonds, or commodities.”—Michael Saylor
In order to restore economies, Bitcoin seeks to decouple economic controls from centralized entities that artificially increase the money supply to benefit their own regimes.
Bitcoin does this by using a permissionless, peer-to-peer protocol that does not allow for the malicious practices that have become common on the global stage in recent years.
Bitcoin provides an escape from the freefalling Turkish Lira and a ray of hope to the Turkish people.
The advent of Bitcoin has provided individuals all around the world with a new means of protecting their wealth from the damaging impacts of inflation.
Bitcoin Adoption in Turkey
Bitcoin is the most popular digital asset among users in Turkey, with 7 out of 10 market participants claiming to trade it on a regular basis.
This data comes from “crypto” exchange platform Paribu.
According to the data, the previous rate of cryptocurrency usage was 0.7% last year.
It increased by 1000% to 7.7 in 2021, compared to a previous survey conducted by Paribu in 2020 that showed the same trend.
Following the findings, Paribu CEO Yasin Oral stated, “Within a year, there has been a tremendous growth in interest in Bitcoin.”
“We believe that Turkey has the potential to be a world leader in the cryptocurrency industry,” Oral stated.
The findings of the “Crypto Money Awareness and Perception Research-2021,” which was carried out by the Akademetre Research Company on behalf of Paribu, revealed that Bitcoin in the Middle Eastern country was seeing significant growth in recent years.