Disinflation Video from the Central Bank – Webtekno

The Central Bank of the Republic of Turkey has taken aggressive action, especially in recent months, against inflation, which has been among the important financial problems of our country and the world in recent years. CBRT is now in a video called “Economy for All” disinflation He explained his goals. In this video, it was explained what disinflation is and why disinflation is requested.

in video “During the disinflation period, prices The rate of increase will slow down and there will be a downward trend in inflation. With the policies implemented, the exchange rate will stabilize, there will be an improvement in the current account balance, a permanent strengthening in capital flows and an increase in reserves. As expectations improve, pricing behavior will normalize.” expressions were used.

Disinflation will begin in the 2nd half of 2024

“What is disinflation? Why do we want disinflation?” In response to the questions in the video “To understand disinflation, it is necessary to first talk about what inflation is.

Inflation is the continuous increase in prices in general. Inflation causes more money to be paid over time to maintain the same standard of living. Disinflation means a decrease in the rate of price increase.

The process of falling inflation during the transition from high inflation to low inflation is called disinflation. During the disinflation process, the inflation rate decreases. With disinflation, the purchasing power of money gradually recovers. The savings function of the national currency comes to the fore. Economic units begin to make more sound investment and consumption decisions.

Thus, uncertainties in the economy decrease and confidence increases. Income distribution improves. The disinflation process creates an important basis for the transition to a period of stability in which a permanent decrease in inflation will be achieved.

“With the strong monetary tightening we have implemented since June 2023, we are creating the basis for the start of the disinflation process and the permanent decline in inflation.” expressions were used.

The rate of increase in prices will slow down

While the date for disinflation is also given in the video, “By ensuring the decline in the underlying trend of inflation, In the second half of 2024 The disinflation process will begin.

During the disinflation period, The rate of increase in prices will slow down and there will be a downward trend in inflation. With the policies implemented, the exchange rate will stabilize, there will be an improvement in the current account balance, a permanent strengthening in capital flows and an increase in reserves. As expectations improve, pricing behavior will normalize.

disinflation period period of stability will follow. Inflation will continue its decline and reach single digits. Predictability and confidence in the economy will increase, and the Turkish lira will maintain its purchasing value. Domestic and international savings and investment demand for Turkish lira assets will strengthen.

The impact of inflation on economic decisions will drop to negligible. Permanent gains in social welfare will be achieved for all economic segments. In this way, price stability, which is the most important contribution the Central Bank can make to social welfare, will be achieved.” statements were made.