Achieving economic stability is challenging in economies with high inflation. Therefore, controlling inflation, reducing it to low levels, and ideally bringing it down to single digits should be a top priority. ### Why Should High Inflation Be a Priority? High inflation disrupts price stability, leading to a continuous upward trend in the prices of goods and services. The expectation of significant price increases further fuels inflation. Thus, inflation driven by expectations becomes one of the
Achieving economic stability is challenging in economies with high inflation. Therefore, controlling inflation, reducing it to low levels, and ideally bringing it down to single digits should be a top priority.
### Why Should High Inflation Be a Priority?
High inflation disrupts price stability, leading to a continuous upward trend in the prices of goods and services. The expectation of significant price increases further fuels inflation. Thus, inflation driven by expectations becomes one of the most serious issues.
When inflation is high, producers face higher production costs, prompting them to stockpile goods instead of selling them. This leads to a supply shortage in the market, causing exorbitant price increases to become commonplace.
High inflation also influences investors' decisions, steering them towards less productive investments that do not contribute to production.
During periods of high inflation, wage earners cannot protect themselves against rising prices, leading to significant income inequality and deepening divides between different segments of society.
The increased uncertainties during high inflation periods make it difficult for international investors to commit to investing in the country, especially for the long term. Additionally, high inflation severely damages the country’s reputation.
All these factors clearly pose serious challenges to macroeconomic stability.
Türkiye and Inflation
Overcoming high inflation has become a critical priority for Türkiye’s economy. The goal is to navigate this difficult period through the use of monetary policy tools by the central bank, alongside fiscal policies aimed at reducing expenditures and increasing revenues.
Lowering the rate of price increases and entering a phase of disinflation—from high to low inflation—will alter the behavior of producers, consumers, investors, and many other stakeholders.
This is expected to mark the beginning of a new era in inflation management.
