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As someone from Argentina, that part about people trying to use US Dollars instead of Lira to avoid inflation hits too close to home.

I don't know why but I just love his explanation of tourism of "people flying into a country, spending piles of money and then flying out again."

Note: Turkey didn't change its name. It has been Turkiye for a rather long time, and the English name for it is Turkey. The same way Germany is Deutschland, Austria is Österreich, Norway is Norge, Hungary is Magyar[ország] and Finland is Suomi. What changed, apparently, is that Turkey decided to use its local name internationally. For instance on products that will now say "made in Turkiye". That's all.

Turkey reminds me a little of Brazil. We had similar debt and inflation problems. They were two countries on the rise in 2010, but politics destroyed both of them. Here tourism is much smaller, but the oil industry is much more relevant.

Fun fact: We didnt fix our issue because we really wanted Economics Explained to rate our economy and this was the only way we could grab his attention. Now that he gave us a rating the government will increase the interest rates.

I sell Zimbabwe hyperinflation banknotes for a living (they're a big collectors item globally). When Zimbabwe's economy went completely bust in 2008 and they printed a 100 trillion dollar note, people used The Euro, South African Rand, and USD. Confidence in government is almost completely non-existent and most people keep their money under their mattress.

i am Turkish and Turkey is a perfect example of how a dictator can ruin a great country single-handedly and even ruin the next generation's future!

Living in a very international city in Europe, I met so many Turkish people that say they love their country and their culture but can’t foresee a future there anymore. The current economic mismanagement is forcing a lot of them to leave the country and find their luck elsewhere, which is just gonna be another drop in the sea of problems they already face.

Tourist didn’t stop going to Turkey in 2016 due to its inability to join the EU. That was irrelevant. In 2016 there were terrorist attacks in central İstanbul and at the airport, in addition there was the failed coup attempt. These virtually killed tourism in 2016 which it didn’t recover from for several years.

As a white collar worker in Turkey, the last couple of months were quite devastating. Watching every price tag go higher every day by significant amounts and not being able to do anything about it certainly gave most people an increasing sense of insecurity day by day. Even though the official inflation rate is %36.08 for the last 12 months, independent studies show that it's simply %80, which I do confirm. On the other hand, the next election is expected to be held in no more than 1.5 years. The government will try to defeat or mask inflation as much as possible. Only time will tell what other genius ideas they will come up with.

I’ve been helping out a couple of Turkish friends since last June, and it’s unbelievably insane how dire their lives have become in such a short span of time. I haven’t been back to Istanbul since 2017 to be honest. But I was there on 9 different occasions between May and November of that year. I still vividly recall, how one Emirati Dirham was equal to 0.94-1.02Turkish Lira during those six months. So, one would argue, that it was volatile even back then. Anyways, 30,000 TL would be the equivalent of 31,900 AED worst case scenario back then, or 29,400 AED on the best of days. Meaning, somewhere between 76.3% and 82.8% of my monthly income. Nowadays, 1 AED equals 5.09 TL. Meaning, 30k TL would cost me 5,890 AED or 15.2% of my monthly income. Which makes it easier and far cheaper for me to help my Turkish friends since last June. As allocating 5% of my monthly income, equals a tad bit over 10,000 liras. Which goes a long way to help them out. What’s worth noting as well, is that since February last, an influx of USD rich Ukrainians and Russians have been a cause behind an increase in property prices across the city, not to mention rents as well, along with nursery/kindergarten and school fees. One of my Turkish friends is married to an Azeri lady, and she’s been offered a 30,000 TL a month job as a Russian Corporate Relations Officer or something, at a Real Estate Company, given that she’s fluent in Russian, being born to Soviet parents and all. Whereas he makes 5000-7000 liras working as a security guard. It just shows you how much money those folks are bringing in, and how many people have been pushed out of their rental apartments, because they were offering large sums of money to landlords, sums beyond the grasp of your everyday Joe down in Turkey.

Came back to watch this after the horrible earthquake in Turkey and Syria. I hope the government can react appropriately to both of these crises to help the people of Turkey after such a horrible tragedy :(

It is absolutely incredible how Turkey at one point was considered a diamond in that part of that world economically and had so much investment from all over, especially South Korea. The US even considered Turkey such an important place that the govt wanted more Turkish speakers, and would pay you to go there to learn the language and culture due to its growing importance both militarily and economically. Erdogan truly tanked a diamond in the rough and its so sad to see. I have friends there that are in the process of leaving or planning to leave due to lack of opportunities, and these are well-educated and highly skilled folk as well. Just sad stuff all around and I do hope things improve there eventually.

Turkey is so unique in terms of many aspects (geopolitically etc.) .Huge respect and loves to Turkey from Australia 🇦🇺

Such detailed and well supported explanation. I hope Turkey can manage their financial problems as soon as possible.

I’m currently in turkey on a 1 month holiday in Istanbul. I can confirm my local kebab shop prices have risen as follows. Day 1 - 50 lira Day 7 - 60 lira Day 14 - 75 lira That’s a 50% increase in 2 weeks

I have a feeling Turkey is going to become like Brazil; a rising power that saw its rise very suddenly turn into a cliff. Not just economically, but if skilled workers leave the country they aren’t going to get them back easily, and that will also hurt any recovery or future growth.

The latest Turkish government move, January 3rd, is to require larger businesses to put 25 percent of their forex holdings into Lira. This will be a disaster for import reliant industries, as a convertible currency reserve is their lifeblood. Turkey should take a hard look at Argentina and ask if they really want to go there.

Many moons ago I worked in the oil industry and if you sent a shipment to Turkey it was too much for the system to handle, so it was reckoned internally in kiloliras. I think a bit later they crossed some zeros off and introduced a new lira. P.S. it's -> its

:( insanların bizi böyle tanıması çok üzücü umarım birgün Türkiye duzelir

I have Turkish family and we visited often. I still remember walking to the local kiosk as a small child and buying ice cream with million lira notes.

Funny anecdote: my dad went to Turkey back in 1995 and on his return he had some spare lira. I think it was like a 10000 lira note and another one. Anyway, I took the currency and stuffed it into a tin and didn’t think about it till about 2013-14. I checked the exchange rate and realised I had over $20000 worth of lira and thought life is amazing. Only to do a bit more digging and realised these were the old lira notes and not legal tender anymore 😫😫😖. Worthless.

Congrats to everyone who contributed to the making of this video! It is such a good summary of what has happened and is happening the Turkey in the last years. A good source to get information. 👌🏼👍🏼

That inflation proof account was tried by Brazil on the 80s. It was called “overnight” because the value was corrected dayly

As an Turk these are what I can say -This crisis is not economic but political -Guaranteed Interest system is an joke, it only works with periods of 3 months and more but 96 percent of the population has an period of 1 month -Dollarization is it’s highest since 2002 even some companies, mostly tech based ones are using an system of Argentina to set prices. -After the new system was announced by the Erdogan. Banks started to give interest rates up to 20 percent for a monthly period. Basically they increased the rates, but to not be seen politcally absurd to his supporters Erdogan did this in a sneaky way. Everthing is same but he opened door for hyperinflation

“The unemployment skyrocketed to 14%….” I would love to have that unemployment rate! Ours in South Africa is officially above 30%, while the youth unemployment rate is about at 60%.

Respect from Turkiye, you painted a totaly right and spot on analysis.

Can you make an updated video on this topic please?

I am Turkish and i live in Turkey. Current interest rate of 14-17% are well below the inflation. So if i deposit my money in a savings account, i lose my purchasing power. That is why most people stay on USD, EURO, GOLD etc.

The government guarantee sounds like a horrible idea to me... They will have to release new money into the market to do this. The higher the inflation, the more money they will be forced to create, increasing the money supply further. Which raises the inflation... So the government is making a promise to keep increasing the money supply as inflation rises. A positive feedback loop! Am I right?

That was on point! Thank you for sharing 🙏

I've been binge watching your videos so fast, I'm not taking time to thank you but thank you!!

If inflation isn't dealt with, no domestic policy can keep the currency from falling. Any decline in supply of Lira due to citizens no longer converting their savings into USD will be exceeded by foreign purchasers no longer willing to offer as much foreign currency for the same amount of Lira as the purchasing power of each Lira precipitously falls.

I live in Turkey and it’s a shitshow nowadays. It’s scary to think that you may not be able to go to school next year cuz it will get so inflated that you wont be able to afford it.

Great video and awesome content, love economics explained. CIA says different about that total GDP/PPP for 2020 tho.

Please add date of the video in pinned comment. Sometimes YT doesn't show date video was released and for such dynamic stories like this one it is very relevant. Thank you for content! Huge fan!

Yesterday i paid 100 liras (the financial equivalent to 100$ in the us in relation to buying power) to order the cheapest "menu" on KFC and a pizza from the local pizzeria. The burger was the size of my palm, the pizza was missing its toppings. Feeling robbed, today i decided to just get instant noodles for lunch from now on, since they were sub 1 lira last time i had checked, it simply couldn't have gotten as bad. The grocery store was out of instant noodles and feeling obligated to buy something before leaving, i wanted to buy some snack to keep myself from starving. With the 10 liras in my pocket, i could barely afford a "king size" bar of chocolate (apparently we call normal size bars "king size" now because even the chocolate bars have shrunk, they were the girth of a finger). I don't even struggle financially (yet), it's that the economy has gotten so bad it's morbidly depressing for even the son of an above average salary household. I feel stuck in some sort of an experiment. I watch videos about life in Burundi to feel grateful that i have a roof over my head and i can still afford to have 2 healthy meals a day no problem.

Great video thanks for breaking it all down so nicely.

Always interesting, thank you.

As a Turkish person living/working abroad right now (as an engineer) because of the economic issues, i really appreciate this video. P.S.: in Turkish, the name of the country has always been Türkiye (which is kinda pronounced kinda like Turkeeyah)

How much stock footage do you need for this video? Economics Explained: Yes

As a Turkish engineering student, i am really upset... :(

Some countries try to get a baker to fix a car and a mechanic to bake pastries.

As a Turk, i can confidently confirm that our current government is licking dog poo on economics, so much that a normal burger king menu is 100 bucks here

Turkey has some of the most dramatic and precious archeological sites in the world also. It's unfortunate they are having such issues.

As a Turkish citizen, I can pretty much say this was on spot...

Really excited for some new videos!

Around 17:00 - that's what Brazil did from the late 1970s until 1994. We did not use the US$ price but inflation: deposit accounts would receive interest rates plus "monetary correction". That created two problems: started the inertial inflation and caused wealth concentration since those with less money could not open deposit accounts. Later, when inflation got larger (300%/year) there were daily systems to insulate money from inflation (this required more than just a banking account but also a minimum deposited in the bank). All I can tell is: it did not work.

Comparing yen to dollars value wise is a bit deceptive, their currency doesn't bother with decimals so one yen is roughly equivalent to one cent.

What matters is the king got his 1100+ room castle

Thank you for this “insightful” video. I do believe that most of the problems ara manageable and agree with your opinion on many points. However as a fellow Turk, I do believe its a bit sad and hopeless to hear multiple times how we as a nation could avoid this. Even though this is not a political channel I do believe a symbiosis of why such economic choices were made within the sociopolitical context would be helpful. Thanks a lot!

It's interesting how English is the only language in the world where people from a country can decide what their country is called in it. They declare that the English name is Turkiye now, but it'll still be called the local variant i.e. Turcia/Türkei/Turquie/Törökország/etc everywhere else.

I like the structure of chapters in the video as guiding questions structure, but could you add those chapters also in the timeline for the video, especially when answering them. That would be super nice.

Just to clarify things, Turkey didn't actually suddenly change it's name, in Turkish the name has been Türkiye for centuries. They just passed a law requiring all foreign spellings of the name must be the same as the local one, just as the Czech Republic (now Czechia) did a while back. It's the same story, same reason.

Despite the high inflation rate, they are still developing pretty well.

Nice video. However, there is one important piece of the puzzle that is missing in the video. While it is true that AKP has reduced public foreign debt since 2002, they have relied on massive privatization of valuable public assets such as factories, ports, mines and other economic enterprises that had been run by the state. Although I'm not against privatization in principle, I prefer to approach the government's privatization policy very cautiously.

Romania had the same borrowing issue up to 2007. after 2010 no loans under 200.000 EUR would be issued in currency other than the Romanian Leu

Thanks for EE, would definitely connect with you in future..

Lovely work!

This new deposit scheme of the central bank of adding Lira to the pile in case its value has decreased over the period of deposit in a bank is also in a way known in Iceland. Money could be placed into price index tied accounts that would grow or shrink with the fluctuations in prices and currency valuation. Loans have historically also been tied to the index in this way, and the borrower will add extra amounts to the amount due (on top of the percentage interest negotiated in the beginning) to make sure the buying power of the amount payed is never reduced due to inflation. These has historically been the only loans available to Icelanders, but in the recent 6-8 years new loan structures have been available where this index connection is not used. They come with higher interests but the idea is that they are more stable during high fluctuations in the currency.

Finally, the long-awaited video on Turkey!

U're telling me that making financial decission solely based on political stance is bad for the people?! No way that's true! 👀

For the national leader board, can you add the year the score was given to each individual country?

Islamic finance: "it's not intrest I promise, but the payments & terms will be the exact same"

Hey bro, I just wanted to mention you're the first person to show Izmir in a video about Turkey

Better understanding the situation, please look into the eyes of our economy minister.

“Could this be a sign of things to come in our own economies”. - Interested to hear more on this topic

I’ll say it again, I looked forward to retiring, moving to Turkey (which I love) and spending my latter years in the culture and ambience of the marvellous country. Then Erdogan was elected. I didn’t think twice about postponing my move, I hoped his reign would be short, he amended the Constitution, had himself appointed for life, purged the Public Service. Now I know, Erdogan has ruined a generation of growth in Turkey.

Dude the footage is so nice i find it hard to listen.. and the tiny little part of my brain that can do economics can't keep up. would love to see some explanatory diagrams interspersed. But great vides overall really like them :)

Great video!

Turkey has an even bigger problem and it's its obsession of making almost all of their regulatory requirements (food, export, import, chemical, etc) having to be certified by a local body. A lot of big corporations try to avoid Turkey at all costs.

A correction: The new savings account gov. just launched, it’s not usd value change over interest, it is either interest rate (%14) or the converted usd value (at the end of the term), whichever is higher. It would be nice to have both on top of each other, the system might have actually worked though. 😅 Thanks for the great content. 👍👍

Thanks to our great Turkish leader for creating 'Economics UNexplained' :)

great video, congrats

A devaluation of currency can be a strategic advantage for exports as long as livelihood for citizens isn't impacted which in the case of Turkey it has been devastating.

For your leader board you should give an indication of trend, since whenever you apply the score, at that point in time the score is likely quite different to a bit earlier or a bit further down the line where you think its going.

Yeah bro we are like paying 130 lira to flour and coming to the the market other day for seeing it become 145 lira here.

EE: “Another yeahr is coming to an end.“ Meanwhile, it's January. :D

It also needs to be pointed out that inflation has a long history in Turkey. From the early Ottoman times, Turkish currency has been under pressure by both influx of precious metals from the West and debasement practices of Ottoman government. This is claimed to be the underlying reason for Turkish people's unwillingness to keep their savings in lira, which could mean the new measurements were doomed from the start. Also, thanks for using visuals from my home city, İzmir! It is so sad that whenever a video is made about Turkey, all we see is Istanbul.

I am a Turk and I am 13 years old. The economic situation is very bad. inflation is called 80%, but independent studies say 150%. Even 80% is too much, inflation is increasing day by day and our purchasing power is decreasing. my family earns between 5000 and 5500 dollars a year. some families earn between 3000 and 3500 dollars.

I would really love to see you do something on Jamaica the Caribbean I just can't understand why Jamaica economy is not growing and it's not doing well it's such a beautiful place have a natural resources

Thanks for the good video. It would be interesting to get an annual look at El Salvador and how the introduction of bitcoin as the national currency is affecting the economy over time.

Finally you made a video about the bullshit that is happening in my country. Thanks man!

Gov doesnt know we have hyperinflation. When someone tells that there is hyperinflation they ask if you are an economist.

9:29 Recep reads [re-JEP]. Letter C always stands for the sound J (as in John) unless it's an obvious borrowing like Coca Cola. Also Türkiye / Turkiye should read as if it were Turkia. Saying Turkey is also ok cuz it's not really polite to ask other countries to change their long lasting traditions. Germany never claims it must be "Doychland" nor does Hungary whose original name is Magyarorság, or Finland which is Suomi etc etc etc.

If your nation exports more than it imports or it is self-reliant then it is not so bad to devaluate your currency. It makes your goods cheaper to foriegn countries, which brings in foreign currency. Turkey is non of the above.

- At least 63% of all Turkish saving accounts in Turkey are in Euro and American Dollar. - The current political interest rate in Turkey is 14% and the announced inflation rate is 36%.Turkish economists are asking one question to Erdogan for a while but there is still no answer .If he really believes that interest is mother of all evil and banned by God then why doesn't he cut it down all the way to 0 ?. They dare him to do it.

like the Australian humor. thanks mate

To summarize, Turkey has a huge potential, but the president cannot use this potential. Even, knowingly and willfully leading to collapse.

I've heard and seen a few things about Erdogan not raising interest before, but only with "it's a bad idea" as a foregone conclusion. Thanks for providing a different perspective on why it might be a reasonable choice in the circumstances.

That is a brilliant analysis of the situation. Well done and thank you. 👍👍👍

Turkey didn’t change its name it’s name was already Türkiye in Turkish. It just made it internationally offical.

Salam 'alaykum. Gecmis olsun, Turkiye. Ben Endonezyaliyim. Turkiye seni seviyorum.

As a person living in Turkey, I can say that the country is beautiful, there are many places to visit in terms of geography.but the country is in an economic crisis, I cannot travel as a person living in turkey, but if you come, you should visit because your money has value :)

Love your no nonsense economic analysis. This one didn't have subtitles/captions. It would help a lot of people who are hard of hearing to also follow you. Cheers.

I think Turkeys Zentral Bank tried to conform more to the European Central Bank. There goal is price stability above all else. They even think that country's like Spain have to low unemployment, cause there is a perfect amount of unemployment for the price stability in each nation.

Did anyone noticed at 02:50 the link was so funny I mean was it purposely done or not but it seems like "economicSEXplained" Lol

Although this video was shot only a few weeks ago, it's surprising how much has changed... The president, who is against interest because of religious reasons, is bragging about how the amount of Turkish Liras kept in interest paying accounts have shot up since this plan was put in place. Oh and btw, in most countries that doesn't speak English natively, their names are usually different in their own local language. Türkiye is the actual name of the country, but the English version was Turkey. Cudos with the video by the way, absolutely love the footages you found!

As a Turk i can safely say that after Erdogan we will face great difficulties. Thank god that i get my wage as Euro and im quite stable but as i look at my friends take a knee because of the incompetent people i feel great shame.