(Bloomberg) -- Turkish Central Bank Governor Hafize Gaye Erkan urged industrialists to believe in the disinflation path envisaged by the monetary authority, warning of deeper consequences if her advice isn’t followed.

“Without the necessary alignment in perception, acceptance and appreciation, the path to addressing inflation could come at a significantly higher cost,” said, Erkan, addressing businesspeople at the Istanbul Chamber of Industry on Wednesday in Istanbul.

Erkan’s speech to the chamber, which has more than 22,000 member companies, comes at time when Turkey has embarked on a tighter policy path in June, after years of loose policies. Since then, the central bank raised its benchmark rate by 31.5 points to 40%, signaling further hikes. 

Despite the rising interest rates and slowing credit, consumer inflation remains on its upward trend, making the bank’s job harder. Consumer prices rose 61.4% in October from the previous year and the central bank sees disinflation starting only in the second half of 2024. 

Turkish officials, including President Recep Tayyip Erdogan, had blamed businesses repetitively in the past, saying price increases were caused by greed. 

“We’re considerably close to the monetary tightness needed to establish disinflation,” Erkan said. 

The bank envisages slowing down the pace of tightening and completing tightening steps in a short time frame, Erkan added, while warning that it is determined to tame inflation even if the businesses fail to cooperate on policy trajectory.

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