403
Sorry!!
Error! We're sorry, but the page you were looking for doesn't exist.
Middle East Tensions Drive Up Inflation Pressure in Turkey—CBRT
(MENAFN) The governor of the Central Bank of the Republic of Türkiye (CBRT) stated that ongoing unrest in the Middle East has caused energy prices to surge, adding cost-push pressures on inflation and indirectly influencing prices across various sectors.
Fatih Karahan told reports that, over the medium term, the conflict is likely to create additional effects on inflation, as both cost- and supply-side disruptions are already intensifying pressures.
Regarding measures taken by the bank to limit the war’s influence on the inflation outlook, Karahan said: "We are determined to ensure the tightness required for the continuation of the disinflation process."
When asked about the consequences of rising oil and energy prices due to the regional conflict, Karahan explained: "The ongoing war has led to a pronounced increase in energy prices, exerting cost-push pressure on inflation. Beyond the direct impact of energy prices, we may also observe indirect inflationary effects across various sectors."
He added that CBRT analyses show a permanent 10 percent rise in oil prices could boost consumer inflation by about 1.1 percentage points over a year. The implementation of a sliding-scale system, however, greatly reduces the pass-through of this increase to consumer prices.
According to calculations, the system brings the impact of oil price changes on inflation down to roughly one-third.
Looking ahead, Karahan noted that the conflict will affect inflation through both supply- and demand-side channels. "Cost- and supply-side disruptions have already started exerting supply-side pressures. On the other hand, demand-side effects will be shaped by domestic and external policies to be pursued during this process," he said.
Fatih Karahan told reports that, over the medium term, the conflict is likely to create additional effects on inflation, as both cost- and supply-side disruptions are already intensifying pressures.
Regarding measures taken by the bank to limit the war’s influence on the inflation outlook, Karahan said: "We are determined to ensure the tightness required for the continuation of the disinflation process."
When asked about the consequences of rising oil and energy prices due to the regional conflict, Karahan explained: "The ongoing war has led to a pronounced increase in energy prices, exerting cost-push pressure on inflation. Beyond the direct impact of energy prices, we may also observe indirect inflationary effects across various sectors."
He added that CBRT analyses show a permanent 10 percent rise in oil prices could boost consumer inflation by about 1.1 percentage points over a year. The implementation of a sliding-scale system, however, greatly reduces the pass-through of this increase to consumer prices.
According to calculations, the system brings the impact of oil price changes on inflation down to roughly one-third.
Looking ahead, Karahan noted that the conflict will affect inflation through both supply- and demand-side channels. "Cost- and supply-side disruptions have already started exerting supply-side pressures. On the other hand, demand-side effects will be shaped by domestic and external policies to be pursued during this process," he said.
Legal Disclaimer:
MENAFN provides the
information “as is” without warranty of any kind. We do not accept
any responsibility or liability for the accuracy, content, images,
videos, licenses, completeness, legality, or reliability of the information
contained in this article. If you have any complaints or copyright
issues related to this article, kindly contact the provider above.
Most popular stories
Market Research
More Story
Comments
No comment