Turkey’s push to bring down inflation cannot come at the expense of production, employment and exports, Istanbul Chamber of Commerce President Şekib Avdagiç said, underscoring the policy trade-off facing the economy as disinflation gathers pace.
Turkey Inflation Slows as Business Warns on Growth
Avdagiç said the central challenge in the final stretch of the year is not just lowering prices, but preserving the industrial base and the labor market while inflation cools. He argued that selective credit, export financing, investment incentives and lower energy costs should complement monetary tightening, rather than leave firms to absorb the full burden of disinflation.
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The comments land as Turkey’s annual inflation slowed to 29.7% in September from 31.51% in August, with monthly price growth at 1.84%, below expectations. That easing has helped steady Treasury yields and improve sentiment in Turkish assets, but it also sharpens the risk that tighter policy could further squeeze domestic demand and corporate margins.
For investors, the message is that the path to lower inflation is still fragile and likely uneven. A slowdown in price growth supports the lira and local bonds in the near term, but a policy mix that overweights rates and underweights credit support could weaken production, delay hiring and dent export momentum.
Avdagiç also said recent measures taken after turmoil in fund markets had helped prevent systemic risk in financial and capital markets. He said the state’s response showed the justice system was working quickly and urged tighter coordination to prevent similar episodes from recurring.
He repeated that Turkey is entering a more expensive, more geopolitical global environment, where the key policy test is reducing the cost of disinflation without fanning pressure on output. The issue is likely to remain central as officials and business leaders watch the next inflation prints and broader policy signals.
| Entity | Gains | Losses |
|---|---|---|
| Turkish consumers | ▲Slower price gains | ▼Immediate demand restraint |
| Central bank / policymakers | ▲More room to press disinflation | ▼Greater pressure to balance growth |
| Exporters / manufacturers | ▲Selective credit, lower energy costs | ▼Tight financing, weaker domestic demand |
| Bondholders / lira bulls | ▲Lower inflation expectations | ▼Any policy misstep that hurts growth |
