Karahan says disinflation continues despite challenging conditions

ISTANBUL

Turkish Central Bank Governor Fatih Karahan said the country’s disinflation process remains on track despite more challenging supply conditions.

Speaking during a presentation titled “Inflation and the Macroeconomic Outlook” at the 19th Türkiye Investment Conference organized by the Türkiye-U.S. Business Council (TAIK) in New York, Karahan said supply shocks had a significant impact on headline inflation and that services inflation continued to show persistence.

“Taken as a whole, the data indicate that the disinflation process is continuing despite more challenging supply conditions,” Karahan said.

Lower rent inflation and softer demand supported disinflation, he noted.

Karahan also said that growth slowed amid a marked moderation in domestic demand and that high-frequency indicators point to further demand moderation in the third quarter.

He also said that inflation expectations warrant continued caution.