Türkiye ‘experiencing the disinflation process step by step’

ANKARA

Despite the effects of external shocks, Türkiye is experiencing a gradual disinflation process step by step, Central Bank Gov. Şahap Kavcıoğlu has said.

“With the support of the policies we have implemented, the disinflation process has begun,” Kavcıoğlu said at a meeting of the Ankara Chamber of Industry.

“Annual Consumer Price Index inflation fell by 30.3 percentage points from its peak in October 2022, reaching 55.2 percent in February 2023,” he added.

“The extraordinary increase in energy prices due to the Russia-Ukraine war prevented a much earlier and faster disinflation. I would like to emphasize that the policy framework we are implementing has the power to reduce inflation. Despite the impact of external shocks, we are experiencing a gradual, step-by-step disinflation process.”

The disinflation process is taking place against the backdrop of a succession of major shocks that threaten the Turkish economy, Kavcıoğlu said.

“In the period ahead, the policy mix implemented under the monetization strategy will strengthen monetary transmission by ensuring monetary stability, continue to support potential supply through the financing cost channel, and contribute positively to the supply-demand balance,” he added.

“As a result, pricing behavior and inflation expectations will improve, and inflation will decline in a sustainable manner.”

The Central Bank governor said the earthquake once again underscored the importance and value of protecting the country’s recent structural economic gains.

“Our economy, with its high production and investment capacity, has the opportunity to continue on its path under the current policy framework, even after the disaster of the century,” Kavcıoğlu said.

“In the period ahead, the liraization strategy, which was formulated with the perspective of sustainable and permanent price stability, will continue to be implemented with determination.”