Karahan vows steps to keep inflation aligned with interim targets
ANKARA
Central Bank Governor Fatih Karahan has told lawmakers that the Central Bank will ensure inflation remains consistent with interim targets through the measures it plans to take.
Speaking before the parliament’s Planning and Budget Committee, Karahan emphasized that while the disinflation process initiated in June 2024 has slowed, the bank remains committed to sustaining it through decisive policy actions.
Karahan emphasized that the results of tight monetary policy are being seen gradually, with domestic demand continuing to slow and demand conditions remaining at a disinflationary level.
Karahan noted that the rebalancing in the composition of domestic demand continues as a targeted outcome of tight monetary policy.
“Compared with the same periods of previous years, we see that in the first half of 2025, the annual growth of total consumption has slowed, while the growth of total investments has increased. Although the annual growth rate of imports rose in 2025, it remains below the levels of 2023. Exports, meanwhile, continue their positive trend,” he noted.
He stressed that progress toward price stability is significant and that all monetary policy instruments will continue to be used resolutely.
He also highlighted that annual consumer inflation rose last month, driven by food and service prices. Monthly service inflation increased under the back-to-school effect, while supply-side factors weighed on food prices. Core goods inflation rose somewhat after April due to exchange rate developments, but Karahan described this as temporary.
Karahan projected that the current account deficit as a share of GDP will remain below long-term averages in 2025, though risks from energy prices and global trade policies persist.
