It is right time for retailers to freeze prices: Minister

ISTANBUL

Supermarkets are now able freeze or reduce prices on consumer goods as market conditions  only recently allowed them to do so, Treasury and Finance Minister Nureddin Nebati has said.

Last year saw pandemic-related costs and developments such as elevated oil and natural gas prices, Nebati told daily Hürriyet in an interview.

“All those were an excessive burden. Prices were on the rise globally. There was also a sudden volatility in the foreign exchange rates in December.”

Inflation expectations climbed at that time, he added. “This was a dangerous condition, but we managed to break this circle.”

“Now, this changed. Consumers are aware that inflation is coming down, and they will react if prices at the shelves go up,” he stressed.

On the producers’ side, they will not hike their prices because they know inflation will not increase, Nebati said, adding prices will not move upward in the next three months.

Producers are also aware that the exchange rates will not go up and that global food and energy prices will not rise due to the recession risks, the minister said.

“Thus, they [supermarkets] responded positively to our requests now. The conditions are appropriate for them to heed our calls,” Nebati explained.

Türkiye’s largest supermarket chains this month announced that they would freeze or reduce the prices of thousands of consumer products during the month of January. Smaller local supermarkets and retailers also followed suit.

The annual inflation rate sharply slipped from 84.4 percent in November 2022 to 64.3 percent last month. Nebati said in his earlier comments that he expected the downward trend in inflation to continue in the coming months.

The minister voices optimism that Türkiye’s current account deficit will not remain elevated as global energy prices show signs of stabilizing.

He noted that Türkiye is an energy-importing country and the war between Russia and Ukraine pushed energy costs last year. “For the current account deficit to endure, global energy prices should keep rising. But, those prices…commodity prices are normalizing.”

Consequently, demand for foreign currencies will ease, which will help prevent the depreciation of the Turkish Liras against other currencies, Nebati said.