ISTANBUL

Price stability is the best way to support growth for central banks, Turkey’s Central Bank governor told a G20 conference on Monday.

Speaking at a meeting organized by the Institute of International Finance in Istanbul, Erdem Basci said that inflation and deflation are two factors that weaken growth.

"Price stability is the best way to support growth for central banks," Basci said, adding that reforms to Turkey’s labor force, labor market, technology and hard infrastructure would enhance the country’s growth potential.

Calling the current decline in inflation “satisfactory,” Basci said: "To end 2015 with five percent inflation will contribute to Turkey's growth."

Turkish Deputy Prime Minister Ali Babacan had said last month at the World Economic Forum summit in Davos, Switzerland that Turkey would reduce its inflation rate to 5-6 percent due to the decline in oil prices in 2015.

"If oil prices keep declining through this year, to see a five percent inflation rate will not be a dream for us," Babacan had said.

Oil prices have fallen almost 60 percent in the last seven months, their sharpest drop since 2008, due to oversupply and low oil demand in world markets.

Turkey's inflation rate was 8.17 percent in December 2014, while its growth rate is projected to be around three percent for 2014.

Hailing Turkey's G20 presidency, Basci also said: "Turkey will show stable growth in 2015 under the country’s G20 presidency."

Turkey has been the 2015 president of the G20 since it took over the post from Australia on Dec. 1, 2014.