Indications have emerged that the economic woes of Turkey have further deepened. This became apparent after details emerged that the country’s inflation rate skyrocketed to over 70% in May.
The rising inflation rate in Turkey has unsurprisingly led to a significant rise in the cost of food and energy, making life tougher for many especially those that live below the poverty line.
According to the country’s statistics agency, food prices have increased by 91.6% based on year-on-year metrics.
This figure becomes even more worrying when placed in the context of the effects of the continued invasion of Ukraine by Russia on the global supply chain.
On a broad scale, Turkey has recorded significant growth over the last few years. However, its economic woes are not unconnected to the policy of its President, Tayyip Erdogan, who has raised rates to cool the resulting inflation.
Multiple analysts have opined that the country’s inflation will likely worsen.
According to Ehsan Khoman, the director of emerging markets research for Europe, the Middle East, and Africa at MUFG Bank, the country’s inflation is expected to hit 80% by the third quarter of the year.
Turkey Citizens Flock Crypto
With the country’s economy in turmoil, Turkey citizens are investing in digital assets to protect them against the falling value of their national currency, the Lira.
Lira has lost over half of its value within the last year, fueling mass adoption of crypto.
According to Vedat Guven, demand for crypto is high in Turkey because citizens are “looking to protect our money from high inflation and high-interest rates.” He added that there are over five million Turks who hold crypto because of the economic downturn.
Due to this high adoption rate, authorities in the country are beginning to work on how to regulate the industry and also possibly tax its operations.