CEO of İş Bankası: ‘Inflation problem will be around for a while’

The CEO of İş Bankası, Hakan Aran, stated that the inflation problem cannot be resolved in the short term.

Aran, who previously claimed that inflation would not drop to a healthy level below 5% in the next five years, recently spoke at the Uludağ Economic Summit about the economy. He emphasized that there is no problem that cannot be solved in the economy if there is an increase in value-added production, efficiency, and correct use of money. According to a report by Dünya newspaper, Aran stated that “when we achieve this, we will see inflation in a range of 10 to 20. Inflation will not drop to a healthy level below 5 years. You can bring it down to a single digit, but you would have to destroy everything in the process. Unemployment would reach 20%, and youth unemployment would reach 40%. The economy would slump. When inflation drops, the priority should be sustainable development.”


Aran emphasized the importance of reducing inflation as the country develops healthily and grows, stating that “inflation will not drop to a healthy level below 5 years. Why won’t inflation drop to a healthy level before 5 years? Because we missed that opportunity a little bit. If we were discussing 19% inflation, I would say different things, but it has now risen to 85%. It becomes more difficult to talk about these issues when inflation is expected to drop to 43%. Moreover, the stickiness effect of inflation in the 40-50% range has occurred. I am worried that this inflation rate of 40-50% will continue for at least 2-3 years. No policy, especially an administration thinking about another election in a year, can fight inflation that fiercely. Therefore, we will have to live with this inflation for a while.”

Aran was reminded of the business world’s criticisms of “not being able to access credit.” Referring to the statements he made about reducing interest rates about six months ago, Aran said, “As I feared, it has become the same. Unfortunately, the reduced interest rates do not have any impact on the market anymore. Yes, the policy rate was reduced to 8.5%, but it has no effect on either loans or deposits. It can be said that there is an impact on loans because a loan policy is being linked to this policy rate. If you do not lend within 1.4 times or 1.8 ranges, you have to pay a penalty.”

Translation: Cem Cetinguc