Economy in Turkey: How Four Years of Inflation Surpassed the Previous Nineteen

A Tale of Two Periods

From February 2003 to September 2021 — that’s 224 months, or nearly 19 years. A baby born in early 2003 would now be a university student, maybe getting married or serving in the military. It’s a long stretch of time. Now take the period from October 2021 to October 2025 — just 49 months, roughly four years. A baby born in October 2025 wouldn’t even be old enough to start school yet.

So what could these two vastly different timeframes possibly have in common?

Astonishingly, both witnessed almost the same level of total inflation. Even more shocking — the shorter, four-year period actually saw slightly more inflation than the previous nineteen years combined.

Over those 19 years, prices rose by 502%.
In just the last 4 years, they rose by 505%.

The average monthly price increase was 0.8% in the first period, compared to 3.74% in the second. Converted to yearly averages, that’s roughly 10% annual inflation versus 55%.

Before and After “Nas”

(“Nas” in the economic context refers to the religious principle that interest (riba) is forbidden in Islam)

Why split the data into 224 months and 49 months? The answer lies in September 2021 — the month when the so-called “Nas” era began.

When the government started cutting interest rates in the name of “Nas,” everything changed.

The currency weakened sharply, inflation surged, and the now-infamous KKM (Currency-Protected Deposit Scheme) was introduced to stop the lira’s free fall — a move that left Turkey burdened with trillions in liabilities.

Market balances broke down. Pricing behavior changed dramatically.
Later, interest rates had to be raised again, but too slowly to tame inflation — instead, the higher rates began choking the economy.

The result? A four-year stretch that erased nearly two decades of relative stability.

The Outcome: Nineteen Years Undone

From 2003 to September 2021, Turkey’s inflation was relatively moderate — by local standards, even “normal.” But after September 2021, it spun completely out of control.

In just four years, inflation surpassed that of the previous nineteen.
And this happened without a global financial crisis or a major external shock.

Remember, the earlier 19 years included the 2008 global meltdown and the 2018 “pastor crisis” — both driven partly by external factors. But after 2021? The causes were almost entirely domestic.

From 238 Lira to 1,855 Lira

Before September 2021, the average price index was around 238. Afterward, it soared to 1,855.

Think of that index as your monthly spending — say on gas, cigarettes, or transportation. What once cost 238 lira now costs 1,855. In other words, something that was 1 lira is now roughly 8 lira.

According to TÜİK Data

These figures come from Turkey’s official statistical institute, TÜİK. Yes, many question TÜİK’s accuracy — and those concerns are legitimate. But until someone provides a full alternative dataset dating back to 2003, it’s the only consistent benchmark we have.

And even if TÜİK’s numbers are understated, they still paint a grim picture. If official data shows that something costing 1 lira now costs 8, the real figure might be 10 or even 15.

Whatever the true number, the message is the same — Turkey’s inflation over the past four years has been extraordinary, even by its own turbulent standards.

Editor’s Note: When President Erdogan refers to “Nas” in the economic context, he’s invoking the religious principle that interest (riba) is forbidden in Islam. So, when he says “We follow Nas,” he means that lowering interest rates is a religious duty, not just an economic decision — because charging or benefiting from interest contradicts Islamic teachings. In practice, this belief was used to justify cutting interest rates despite rising inflation, under the idea that moral and faith-based economics would ultimately bring prosperity.

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Article translated and edited from an article by Alaattin AKTAŞ on ekonomim.com