Economist Karavelioglu urged TRNC to switch to inflation targeting policy

Associate Professor of Economics Ahmet Melih Karavelioglu stated that the economic difficulties in the TRNC could be overcome through the implementation of an inflation targeting policy and the development of its own economic program.

According to Karavelioglu, Northern Cyprus needs a model adapted to the country's realities, aimed at reducing inflation and stabilizing the cost of living.

“If there is a vision and the political will to create such a program, we already have the institutions capable of implementing it,” the economist emphasized.

He noted that the TRNC Ministry of Finance possesses the tools to conduct fiscal policy, while the Central Bank, despite certain limitations, is capable of participating in the implementation of the monetary strategy.

Karavelioglu believes that the main problem remains the lack of a long-term economic vision and political determination.

The economist also stated that inflation targeting would make the economy more predictable for both businesses and the population. In his view, having an official inflation target will make it easier to identify unjustified price increases and combat the excessive overpricing of goods and services.

“When the state sets a specific inflation benchmark, it becomes easier to control pricing and limit groundless price hikes,” he noted.

Furthermore, Karavelioglu stressed that with Turkey's support, the TRNC could develop its own economic model that takes into account the characteristics of the local economy.

According to him, the key condition for this remains the formation of political will based on economic knowledge and a strategic approach to the country's development.