Implementing a Robust Disinflation Program
Treasury and Finance Minister Mehmet Şimşek spoke at the Turkish Industrialists’ and Businessmen’s Association (TÜSİAD) High Advisory Council Meeting about the economic program’s focus on sustainable high growth. He emphasized the importance of balanced growth for sustainability, stating that the Turkish economy is moving towards a sustainable growth path with the elimination of imbalances.
Şimşek highlighted the significant reduction in the current account deficit to national income ratio, aiming to continue with a deficit below 2 percent this year. He also discussed the government’s efforts to reduce the budget deficit to national income ratio below 3 percent next year, emphasizing the importance of fiscal discipline for disinflation and structural reforms.
The Minister mentioned the achievements in reserve adequacy, exchange rate risk reduction, and the decrease in the risk premium with Turkey’s stability and reform program. He clarified that the increase in reserves is not due to hot money but reflects trust in the program and improved access to external resources at reasonable costs.
Addressing the issue of inflation, Şimşek expressed confidence in the ongoing disinflation program and projected a gradual decrease in inflation rates over the coming months. He emphasized the program’s three-year duration and the expected improvements in inflation expectations and economic stability.
Şimşek outlined the government’s commitment to ensuring fairness in the distribution of the program’s burden, with measures such as tax exemptions for low-income individuals and adjustments to income tax brackets. He also mentioned the review of public expenditures to enhance efficiency and competitiveness, focusing on sectors like food supply and green transformation.
Overall, Minister Şimşek’s speech highlighted the government’s dedication to sustainable growth, fiscal discipline, and structural reforms to improve Turkey’s economic outlook and strengthen its position in the global market.
