one of the two economies that recorded positive growth in 2020. data on the first half of 2021 showed that growth remained positive. the positive performance of vaccination in europe has been reflecting on our economy through the tourism and external demand channels. in this context, net exports also continue to contribute positively to growth. high - frequency data also signal a recovery in the labor market on the back of the reopening. while employment in the services sector was on a slower recovery track amid pandemic restrictions, the losses of the pandemic period have been fully compensated for with the recent surge in services employment. besides, on the back of strong exports, industrial employment has been following a more positive course compared to other subcategories in the recent period. all in all, we see that non - farm employment started to recover first with the help of the industrial sector, and reached pre - pandemic levels in early 2021 despite the limited contribution from the services sector. finally, we can say that the labor market has largely overcome the effects of the pandemic on the back of the services sector and tourism. distinguished guests, during the post - pandemic recovery, economic activity started to normalize at a global level. however, we see that a series of problems that may be largely attributed to the pandemic period have caused a rise particularly in producer prices in developed and developing countries, as is the case in turkey. therefore, central banks are closely monitoring the implications of high inflation for expectations and international markets in the current normalization period. one of the key drivers of the increase in inflation was rising commodity prices. we witnessed sharp increases in both energy and non - energy commodity prices due to the recovering global demand. parallel to the rise in commodity prices, supply constraints caused by the failure of production to match the rapidly increasing demand also play a role in the rise in prices. increasing international transportation costs and lengthened delivery times also drive producer prices up. we see that post - pandemic problems such as container shortages create a supply - demand mismatch, exerting upward pressure on prices. the fact that exchange rates and commodity prices, which used to explain producer inflation developments in turkey to a large extent, have fallen short of explaining producer inflation in the recent period points to additional supply - side factors. recent surveys of the european region reveal that supply constraints are among the leading factors that restrain manufacturing, and their impact has increased significantly. these developments show us that pandemic

- related conditions or their impacts have not disappeared yet. central banks continue to emphasize these factors in their recent evaluations of inflation. thus, the gap between producer and consumer inflation has recently increased well above the long - term average in many advanced and emerging economies. for instance, ppi is four times the rate of cpi in the euro area. in the price developments during the pandemic, we have seen that a limited group may have a significant contribution to inflation. for example, the durable goods group, which had decelerated on average in the us for the last 25 years, has been one of the items that had the largest contribution to the recent rise in inflation, due also to supply constraints. in the reopening and economic normalization period, energy and services prices registered significant increases across the world. global central banks think that energy and pandemic - driven high rates of price increases in some sectors will prove to be temporary with the normalization in demand composition, easing of supply constraints, and waning base effects. these factors will also have a downward effect on turkey ’ s inflation in the upcoming period. having touched on the current state of global inflation and how it has been affected by pandemic - driven conditions, i would now like to share with you our evaluations of inflation developments in turkey. in august, annual inflation rose by 0. 30 points to 19. 25 %. in this period, annual inflation of the b index, which is a core inflation indicator and obtained by excluding unprocessed food, energy, alcoholic beverages and tobacco from the cpi, decreased by 0. 05 points to 18. 46 %, and that of the c index, which excludes processed food from the b index, declined by 0. 46 points to 16. 76 %. in august, while annual inflation increased significantly in the food group, it posted a limited rise in services and receded across other main groups. meanwhile, producer inflation continued to increase due to commodity prices, disruptions in supply chains, and demand conditions. at this point, i would like to note a couple of points regarding pricing behavior. recently, price increases in certain products have far exceeded their historical averages. considering the products with the largest contributions to inflation, we see that the annual price increases in august may have been more than three to four times the average price increases in the last 10 years. while factors such as the pandemic - driven rise in commodity prices and supply constraints are some of