There is again news from Turkey that is even worse than expected: In December the cost of living rose sharply and is now 36.1 percent higher than a year ago.
Economists had only expected an increase of around 30 percent in advance, which in itself is a disaster for many people.
Now it gets even harder, because the price increase of more than a third year-on-year is just the average.
According to the Turkish statistical office, the cost of food rose by as much as 44 percent at the end of the year, and those in the transport sector by 54 percent. This hits hard the population, which is increasingly divided into a few rich and more and more poor. Strict price comparisons and abstinence from consumption are already part of everyday life in the thinning middle class. Others have to work harder to keep their homes warm and their families fed up.
Much of the price hike can be attributed to the dramatic decline in the local currency, which depreciated about 44 percent over the past year. One consequence is that the bill for imported goods increases. But the country is dependent on the import of raw materials and intermediate products, but above all of oil and gas. The price shock on the energy markets makes imports even more expensive: a barrel of oil costs more dollars and more lira have to be spent for one dollar because of the devaluation.
With a certain time lag, this affects prices; companies pass the costs on to consumers.
The December data therefore reflects developments from October and November.
Because the lira has continued to decline in value since then, a quick end to the price increases is not to be expected.
Some economists expect 40 to 50 percent for January.
The producer prices were almost 80 percent above the previous year's level.
Large parts of the population are driven into poverty
Current developments are increasing the pressure: At the turn of the year, the prices for electricity and gas rose by up to 125 percent for businesses and by up to 50 percent for consumers.
Such price jumps relativize the increase in minimum wages by half, which was also decreed at the turn of the year.
The country can hardly defend itself against the price pressure of the international markets. It would be all the more important to resolutely tackle the homemade causes of the crisis. But President Recep Tayyip Erdoğan makes no move to deviate from his bizarre monetary policy course. While central banks around the world are reacting to rising inflation risks with rising interest rates - even the European Central Bank has apparently started to rethink - the Turkish central bank has lowered interest rates at the request of the president: since September by a full 5 percentage points to 14 percent.
This is the stuff from which the currency crisis is constructed, which in turn fuels inflation and drives large parts of the population into poverty.
In any case, this policy has deeply shaken confidence in the stable value of the lira: Those who still had lira have long since exchanged their money for gold and foreign exchange.
Erdoğan now wants to get to these reserves.
The means to an end are state insurance against currency losses.
Erdoğan promises that the state will compensate for any currency losses for deposits held in lira.
Similar considerations are circulating for gold holdings and for people and institutions that will subscribe to government bonds issued in lira in the future.
No sooner had Erdoğan hit the market with the idea just before Christmas than the lira had suddenly recovered from the losses of the past few weeks.
The increase in value was breathtaking.
Instead of 18.40 lira, the dollar suddenly cost less than 11 lira.
That was still a lot more than 7.44 lira at the beginning of 2021, but still.
But: since then, the currency has lost value again.
After the inflation hammer at the start of the year, it was again at rates above 13.40 lira per dollar on Monday lunchtime.
A question of trust
This feeds doubts about the viability of Erdoğan's model of placing the currency risks on the state budget and thus on future taxpayers, while small investors exchange their currencies en masse. It cannot be ruled out that state and semi-state actors have given lira purchases against the dollar. Erdoğan is also looking for financial aid in friendly non-Western countries: in China, Qatar, the United Arab Emirates, and also the brother-in-arms Azerbaijan. Any hidden political costs could only become known later.
In the end, it's all a matter of trust.
But the Turks have less and less trust in their sovereign ruler, even if he largely controls the media, bludgeons protesters and denounces opposition politicians as "terrorists" and incites the public prosecutor's office on critics (not only of his economic policy).
In polls, Erdoğan, who began his political career as a successful economic reformer, is increasingly losing approval.
Elections will take place next year at the latest.
Quite a few believe that the currency and economic crisis that he has contributed to will decide his political fate.