climbed to a record high with the additional effect of the significant rise in the labor force participation rate ( graph 24 and 25 ). the most recent data indicate that the rise in the unemployment rate continued with further acceleration in the first quarter of 2009. within this framework, it is estimated that the current conditions will continue to curb the upward trend in unit labor costs and the rise in domestic demand. graph 24 : non - agricultural employment graph 25 : non - agricultural unemployment ( seasonally adjusted, million people ) ( seasonally adjusted, percent ) 16. 5 16. 0 15. 5 15. 0 14. 5 14. 0 source : turstat, cbt. 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 source : turkstat, cbt. the rapid policy rate cuts coupled with the fiscal stimulus plan designed to revive domestic economic activity are expected to underpin domestic demand as of the second quarter of 2009. as i have mentioned earlier in my speech, reaching lasting stability in the global economy will take time and therefore, no notable recovery is expected in domestic economic activity in the short run. within this framework, aggregate demand conditions are expected to continue to support disinflation for some time ( graph 26 ). in sum, compared to the january inflation report, the revised inflation forecasts are based on increased favorable contribution from aggregate demand conditions to disinflation. graph 26 : output gap ( percent ) - 2 - 4 - 6 - 8 - 10 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 q1 q3 q1 c3 q1 q3 q1 q3 q1 q3 q1 q3 q1 q3 q1 q3 q1 q3 q1 source : cbrt. the problems in global economy and tighter credit conditions still persist. following recent financial measures and policy rate cuts, domestic demand is expected to gain a relatively stable trend in the second quarter of 2009 and growth is expected to generate positive rates as of the final quarter of 2009. meanwhile, considering the current global economic outlook, it is estimated that access to foreign financing facilities will remain limited for a while, economic agents will continue their cautious stance and no significant pick - up will be observed in aggregate demand in the short run. moreover, when the sharp decline in non - agricultural employment is taken into account, it is estimated that the level of disposable income will remain low for

durmus yılmaz : recent economic and financial developments in turkey speech by mr durmus yilmaz, governor of the central bank of the republic of turkey, at the press conference for the presentation of the inflation report, ankara, 30 april 2009. * * * distinguished guests and members of the press, welcome to the press conference for the presentation of the april 2009 inflation report, one of the most important communication tools of the inflation - targeting regime. the report typically elaborates global and domestic macroeconomic developments and presents the medium - term inflation forecasts revised in line with the previous quarter developments. it also presents six boxes examining the recent monetary policy decisions and the relevant economic developments. now, i would like to give you a short summary of our evaluations and the central bank ’ s revised inflation forecasts in the inflation report, which will be posted on the cbt website today. 1. inflation developments distinguished members of the press, the world economy has been undergoing a period dominated by dynamics quite unlike to those of previous years. with the loss of confidence resulting from the on - going financial crisis, the global economy entered a significant contraction trend after a long period of time. impacts of the crisis on real economic activity deepened in the first quarter of 2009. thus, inflationary pressures, which were perceived as a major concern until the last quarter of 2008, were overtaken by fears of deflation in developed countries in the first quarter of 2009. in this context, i would like to start my speech by once more underlining that inflation developments in turkey in the first quarter of 2009 should be considered in the light of these global conditions. in the first quarter of 2009, consumer prices increased by 1. 05 percent and annual consumer inflation became 7. 89, remaining within the limits of the uncertainty band. backed by the significant slowdown in economic activity and improvement in cost - based effects, the decline in inflation gained ground and spread across all subgroups. in addition, the short - term exchange rate pass - through on consumer prices remained limited in the previous quarter. the contribution of all main groups excluding tobacco and gold, which posted high - rated price hikes to annual inflation weakened in the first quarter of the year. while the contribution of food and energy to annual inflation decreased especially due to the marked decline of annual inflation in energy prices, the contribution of services prices also continued to diminish owing to the fall in costs and the slowdown in domestic demand ( figure 1 ).