In a statement on Jan. 30, Turkey’s Central Bank Governor Murat Uysal announced the inflation rates for this year and 2021 as 8.2 percent and 5.4 respectively.
The estimated rates are quite optimistic given the stubbornly high inflation that Turkey has experienced in recent years. Amid an embattled lira that sunk in value throughout the course of much of 2018, inflation hit 20.3 percent December of that year, while in 2019, inflation remained in the double digits, and was 11.8 percent by the end of the year.
High inflation has been among the key issues Turkey has faced over the past several years, with the price of basic goods such as produce and other essential food products having reached relatively high prices when purchasing power is taken into consideration.
“The estimates that we have shared are based upon a framework in which global financial conditions will remain moderate and the gradual improvement in the country’s risk premium will continue in the period ahead. The improvement of financial conditions supports recovery in the economy. In this context, we envisage a view that aggregate demand conditions will not be inflationary,” Uysal said.
“Presently, we have evaluated that our current policy stance is compatible with the targeted path for disinflation. As we have stated in the text of the decision of the Monetary Policy Committee in the month of January, the cautious stance in monetary policy must be maintained in order for inflation to decrease in line with the target path. Therefore, taking into account the indicators for the main trend, we will determine the policy steps and monetary stance that we can take in the period ahead of us in a way to ensure the continuity of the fall in inflation,” Uysal said.
Referring to the anticipated move of the Central Bank headquarters from the capital of Ankara to Istanbul, Uysal said the move had been on the agenda for quite some time, and that some units would be transferred to Istanbul in advance.