Central Bank Monetary Policy Committee Meeting

In the summary of the Board meeting held on 16 January, consumer prices (CPI) decreased by 0.40 percent in December, while annual inflation fell by 1.32 percentage points to 20.30 percent. Depending on the decrease in inflation rate, the highest contribution came from energy and basic goods groups. While the changes in oil prices and exchange rates in the energy group contributed positively to the economy, the exchange rate in core goods prices also affected the weakening of domestic demand. In short, in December, consumer price inflation (CPI) resulted in demand-side effects due to the weakening in economic activity as well as TL value gains. The service group had a positive impact on the economy and inflation fell by 0.21 percentage points to 14.46 percent. The course of inflation remained flat in the communication group while other subcategories decreased. In the rent group, the downward trend in monthly inflation trend continued and the weakening in domestic demand conditions reaffirmed that the services group contributed to the slowdown in inflation in general.

"Factors Affecting Inflation"
 
Despite the fact that there has been some signs of slowdown in the course of global growth recently, foreign demand remains strong. Despite the slowdown in domestic demand, the tendency of the firms to move towards foreign markets and the flexibility of market diversification support the export of goods; The improvement in the external balance continues with the demand for tourism. This situation increases the expectation that the improvement in the current account balance will continue in the upcoming period.
In recent data, it is seen that balancing tendency becomes more evident in the economy. The strong outlook in exports of goods and the strong demand for tourism as well as the sharp decline in imports due to domestic demand are thought to be contributing positively to the quarterly and annual growth in the last quarter and limiting the weakening of economic activity. At the same time, it was stated that extending the tax cuts on durable goods would contribute positively to consumption demand in the first quarter.
You can find a summary of the meeting at https://www.tcmb.gov.tr.