Türkiye's Inflation: A Slow but Steady Descent

Türkiye is making progress in its fight against inflation. The finance minister expects the annual rate to drop into the 20% range by February. This is a significant improvement from the 64%-65% seen over the past three years. The government's goal is to bring inflation down to single digits, but this will take time. The central bank has been playing its part. It recently cut the benchmark interest rate by 1. 5 percentage points, bringing it down to 38%. This move was expected, as inflation has been easing. In November, it dropped to 31. 07%, the lowest in four years. The bank says this is partly due to lower food prices. However, the bank warns that inflation expectations and pricing behavior could still pose risks. It plans to keep monetary policy tight until price stability is secured. The bank's ultimate goal is to reach a 5% inflation rate in the medium term. The government has a three-phase plan to tackle inflation. The first phase focused on controlling inflation and stabilizing the economy. The second phase aims to address macroeconomic imbalances. The third phase will ensure long-term policy sustainability through structural reforms. While the progress is encouraging, it's important to note that the government's target for next year is between 13%-19%. The market expects it to be in the 20s. The finance minister believes the upper end of this target is achievable, barring any additional shocks. In summary, Türkiye is on the right track, but there's still a long way to go. The government and the central bank are working together to bring inflation down and stabilize the economy. It's a complex process, but the results so far are promising.