Introduction to Türkiye’s Economic Situation
Central Bank of the Republic of Türkiye (CBRT) Governor Fatih Karahan recently reaffirmed the bank’s commitment to maintaining a tight monetary policy until price stability is achieved. He emphasized that Türkiye’s ongoing disinflation process will not be derailed by domestic demand pressures. Karahan delivered a presentation in Washington, D.C. titled "Challenges in Reading Macroeconomic Data in Türkiye," where he addressed the challenges of interpreting macroeconomic indicators due to the country’s rapid digitalization.
Maintaining a Tight Monetary Policy
Karahan stated that the CBRT’s restrictive monetary stance will remain in place as long as inflationary risks persist. He said, "The tight monetary policy stance, which will be maintained until price stability is achieved, will strengthen the disinflation process through demand, exchange rate, and expectation channels." The central bank will continue to monitor a wide range of real-time indicators to support its policy decisions. The Turkish central bank’s next Monetary Policy Committee (MPC) meeting is scheduled for October 23, where the bank is expected to continue its rate-cut cycle from the current 40.5% level.
Impact of Digitalization on Economic Readings
Karahan noted that Türkiye’s shift toward a more digital economy has made traditional data harder to interpret. He said, "Data sources differ regarding the strength of economic activity," and that the growing use of electronic invoicing and digital payments has blurred the usual signals used to gauge consumption and output. While digitalization promotes transparency and curbs tax evasion, it can also make short-term figures appear stronger than underlying demand. According to Karahan, the number of e-invoicing firms nearly tripled between mid-2021 and mid-2025, inflating reported sales across multiple sectors.
Economic Indicators and Demand Pressures
CBRT analyses showed that retail and card spending data exaggerate consumption growth, while adjusted figures track more closely with GDP-based private consumption. Credit indicators point to cooling demand, with interest-bearing credit card balances falling to 36% in August 2025 from 41.4% in early 2022. Karahan said, "Loan growth excluding credit card balances has remained stable." He added that the CBRT now monitors a broader set of indicators to make more accurate real-time assessments. According to Karahan, economic activity and demand indicators point to a continued moderation, citing the bank’s firm stance on maintaining price stability.
Conclusion
In conclusion, the Central Bank of the Republic of Türkiye is committed to maintaining a tight monetary policy to achieve price stability. The bank’s governor, Fatih Karahan, emphasized that digitalization has complicated the interpretation of macroeconomic indicators, but the bank is working to monitor a broader set of indicators to make more accurate real-time assessments. With the next MPC meeting scheduled for October 23, the bank is expected to continue its rate-cut cycle, adopting a more cautious tone following September’s inflation figures. Overall, the CBRT’s focus on curbing inflation and maintaining price stability is crucial for Türkiye’s economic growth and development.
