Statements on Disinflation and Investment from CBRT Governor Fatih Karahan
CBRT Governor Fatih Karahan stated in his speech at World Investor Week that price stability will strengthen the investment environment and disinflation will support productivity.
Central Bank of the Republic of Turkey Governor Fatih Karahan stated in his speech at the World Investor Week seminar that falling inflation will increase predictability, strengthen the investment environment, and that disinflation will support productivity.
Investment Environment and Predictability
The predictability that will increase with falling inflation will facilitate companies' decision-making processes and strengthen the investment environment.
Price stability will reduce uncertainties and create a more favorable ground for investment.
Productivity and Financial Resilience
It was stated that productivity growth strengthens firms' resilience against shocks, and that disinflation also supports productivity.
It was emphasized that non-performing loans are lower in firms with high productivity levels.
Inflation Trends and Services Group
Recent inflation developments show that progress has been made in the disinflation process and that the main trend of inflation is slowing down.
Annual inflation in the services group decreased by 7 points compared to last year, dropping to 37 percent.
Geopolitical Risks and Energy Prices
It is assessed that the loss of momentum in the disinflation process this year stems from the impact of geopolitical developments on energy prices.
Due to the persistence of geopolitical risks, energy prices continue to remain high.
Domestic Demand and Monetary Policy
Current indicators confirm the weak course in domestic demand.
Thanks to the tight stance in monetary policy, it is observed that the deterioration in inflation expectations has remained limited.
Turkish Lira Preference and Deposits
It was stated that domestic residents' preference for the Turkish Lira continues to remain strong.
The share of TL deposits has risen above 61 percent, and outflows from funds have largely directed toward deposits.
Current Account Deficit Expectations
It is anticipated that the disinflation process will gain momentum as the impact of shocks subsides.
It is estimated that the ratio of the current account deficit to national income will realize below its long-term average in 2026.