Central Bank’s governor gives a time: “Inflation will begin to decline”

Central Bank Governor Hafize Gaye Erkan spoke at the Istanbul Chamber of Industry (ISO) Joint Committee Meeting for the evaluation of sectoral issues. Erkan stated that inflation would start to decline in the second half of 2024.

Central Bank Governor Hafize Gaye Erkan addressed the Istanbul Chamber of Industry (ISO) Joint Committee Meeting for the evaluation of sectoral issues.

Referring to the Central Bank’s inflation report, Erkan said, “Annual inflation will start to decline in the second half of 2024 after reaching its peak in May due to base effects. Beyond the base effects, the decline in inflation will manifest itself through various channels.”

Emphasizing that low inflation carried a meaning beyond price stability, Erkan said, “Low inflation, which is a prerequisite for high, sustainable, and low-volatility national income growth, has become synonymous with stability in a much broader sense than just price stability, and our country no longer has the luxury of compromising this stability.”

“POSITIVE DEVELOPMENTS IN PRICING BEHAVIORS”

Erkan claimed that the rate of price increases in products affected rapidly by monetary policy has been decreasing:

“Improvements in expectations about future inflation are reflected in price formation. Indeed, positive developments are occurring in pricing behaviors. While the rate of price increases in product groups more affected by monetary policy, such as automobiles, white goods, and furniture, has been decreasing, discounts have been observed for the first time in a long time. It is quite gratifying for both consumers and the competitive environment that companies have started price reductions by perceiving a retreat in excess demand.”