STORY: Expert remains cautious about inflation forecast in Türkiye 
SHOOTING TIME: Feb. 8, 2024, File
DATELINE: Feb. 10, 2024
LENGTH: 00:05:01
LOCATION: Ankara
CATEGORY: ECONOMY

SHOTLIST:
1. various of the press conference of Fatih Karahan, the new Governor of Turkish Central Bank (Feb. 8, 2024) (courtesy of ihlas news agency)
2. various of Turkish Central Bank
3. various of Turkish lira
4. various of some apartments in Ankara, Türkiye
5. various of fields in Türkiye (01:03-02:12) (Aug. 5, 2022) (courtesy of ihlas news agency)
6. various of Turkish lira
7. SOUNDBITE (Turkish): MUSTAFA SONMEZ, Istanbul-based economist

STORYLINE

The new head of Türkiye's central bank said the bank will maintain its tight policy stance until high inflation drops to target, as it held its year-end consumer price forecast at 36 percent.

In a press conference in the capital city of Ankara, Fatih Karahan said that monetary tightness will be maintained so long as a disinflation process yields results.

Karahan recently replaced Hafize Gaye Erkan, the first woman to run the bank, who had aggressively hiked interest rates since June last year to cool inflation, orchestrating a U-turn away from years of loose monetary policy that fueled skyrocketing inflation.

Türkiye's inflation rate climbed to an annual 64.9 percent last month, the highest level in months.

While policymakers insist that inflation will sharply decelerate in the second half of the year, some experts said that official forecasts may have to be revised upwards because of continued consumer price increases.

SOUNDBITE (Turkish): MUSTAFA SONMEZ, Istanbul-based economist
"The central bank is insistent on its tight policy measures, which is understandable, therefore, it did not change its inflation forecasts. However, Türkiye's dynamics won't allow inflation to drop to 36 percent at the end of the year.
The central bank is showing determination for tight policy but the inflation trajectory is not satisfactory.
Food inflation and housing, rent prices are extremely high, putting very significant pressure on households.
Food inflation has to do with agriculture, however, this sector has been neglected and farmers are frustrated.
The lack of a designed agricultural policy is fueling food inflation upwards.
Housing is another problematic sector. There are no sufficient housing units to satisfy the demand, and the prices of those available are extremely high for low and middle-income consumers.
Rent prices are also exorbitant.
Rates are below the inflation rate.
In the current scenario, consumers prefer to buy hard currency or purchase goods that will inevitably be more expensive in the short term instead of savings.
Utility prices are expected to soar dramatically after the March local elections. They have been pushed under the rug, but energy prices will rise significantly, further fueling inflation in coming months."

Xinhua News Agency correspondents reporting from Ankara.
(XHTV)