Sharp decline in inflation to continue, says minister

ISTANBUL

The sharp decline in the inflation rate will continue in coming months, Treasury and Finance Minister Nureddin Nebati has said, calling on businesses to support efforts to rein in inflation by freezing and reducing prices.

“We are aware that the fight against inflation required a multifaceted approach and coordinated efforts. We will overcome this problem together without causing unemployment and economic contraction,” Nebati said in a meeting addressing members of the Independent Industrialists and Businessmen’s Association (MÜSİAD).

Nebati praised some supermarket chains for freezing or reducing prices, urging other businesses to follow suit.

Costs are declining, but if prices are not coming down in line with the decline in costs, then “there is a problem here,” the minister said.

“Expectations that inflation would begin to slip indeed materialized in December. Commodity prices in the local and international markets are not likely to increase in the period ahead. The volatility in the foreign exchange rates eased.”

The decline in the inflation rate will continue in the first months of this year due to the normalization in commodity prices, the improvement in consumer and producer inflation expectations, as well as support from the private sector, Nebati said.

What matters is not only the measures the government takes but also actions to be taken by the business circles, he furthered.

This week, four large supermarkets, ŞOK, Migros, A101 and CarrefourSA announced that they decided to freeze or reduce prices on a wide range of products during January.

Two smaller retailers, Happy Center and Onur Market, also made similar announcements on prices.

Meanwhile, members of the Türkiye Retailers Federation (TPF) will not increase prices, Ömer Düzgün, the president of the trading body, said on Jan. 6.

Smaller local supermarket chains will keep the prices of food, durable consumer goods, cleaning products and kitchen utensils will be kept unchanged, Düzgün wrote on Twitter, noting that the federation represents 14 associations and 5,500 stores.

“I congratulate those enterprises for freezing and reducing prices. I am calling on all businesses to take similar steps,” Nebati said.

The annual inflation rates sharply slowed from 84.4 percent in November 2022 to 64.3 percent last month. The monthly increase in consumer prices eased from 2.88 percent to 1.18, while producer prices fell 0.24 percent in December after rising 0.74 percent in November.