ICI President Bahçıvan: Interest Rate Cuts Difficult Without Lower Food Inflation

Mental Revolution and New Paradigms Erdal Bahçıvan, Chairman of the Board of the Istanbul Chamber of Industry (ICI), shared critical assessments regarding the current state of the Turkish economy.
Stating that the world is changing rapidly, Bahçıvan emphasized the need for a mental revolution in economic approaches, noting that the problems of the 2020s cannot be solved with a 1990s perspective.
Bahçıvan argued that discussions in Turkey are still conducted within the frameworks of the past and stated that current issues must be addressed with a new vision.
Food Inflation and OECD Comparison Analyzing inflation data, Bahçıvan noted that core goods inflation, which covers industrial products, has receded to 17.7%.
However, he reminded that the primary concern for society remains food prices.
Citing data from December 2025, the ICI President pointed out that food inflation in Turkey stands at 28.3%, while in Estonia—the next highest among OECD countries—this rate remains at 5.6%.
Bahçıvan emphasized that food is the most fundamental expenditure item affecting all segments of society.
The Path to Interest Rate Cuts Leads Through Agriculture Stating that the fundamental problem in the economic backbone stems from the agriculture and food sectors, Bahçıvan said that solutions should be sought in agricultural policy before monetary policy.
Bahçıvan predicted that if food inflation is reduced to OECD averages, around the 5.5% band, overall inflation would drop to the 15-18% range.
He noted that such a decline would allow the Central Bank to implement an interest rate cut of approximately 15 percentage points, highlighting the vital importance of agricultural reform for macroeconomic balances.