Turkey Fights Inflation: How Dramatically Prices Have Fallen

Recent data shows significant progress in the fight against inflation in Turkey. According to information from Jin10, the consumer price index in February increased by 4.84% month-over-month, although this rise was mainly due to seasonal price adjustments and increased costs of food and beverages. The more optimistic annual outlook indicates that the year-over-year inflation rate has decreased to 30.65%.

Major Setback: How Turkey Reduced Inflation

Turkey’s Vice President Yilmaz emphasized in recent statements the government’s determination to maintain a strict monetary policy and greater discipline in public spending. The government recognizes that although the inflation growth rate has been reduced by 45 percentage points since May of last year, current levels still remain above an acceptable range. Turkey is beginning to see the effects of its stabilization efforts but understands that returning to normal inflation levels will require further efforts.

What’s Next for Turkey? Tightening Policy Will Continue

The current restrictive monetary conditions will not be eased in the near future. Financial institutions remain focused on maintaining discipline in public spending and tightening credit conditions. For Turkey, a change in economic policy stance will only be possible once price declines reach more satisfactory levels—well below the current 30%.

The government claims that the systematic reduction in inflation rate observed in Turkey indicates the effectiveness of its strategy. However, Vice President Yilmaz clearly signals that there will be no compromises on fiscal and monetary discipline—these are key tools in Turkey’s final effort to overcome the problem of high prices.