2024 ‘year of restoration’ in economy

ISTANBUL

The targets in the Medium-Term Program (MTP) announced by the government after the elections are realistic, says Alpaslan Çakar, president of the Banks Association of Türkiye, adding that there is a correlation between all the figures.

"I only said that the inflation target was too ambitious. I think inflation will be shaped in the 40-45 percent band at the end of 2024 [the target in the MTP is 33 percent]," Çakar told a group of economy journalists he met at the Ziraat Bank headquarters in Istanbul.

The years 2022 and 2023 were dubbed as the "years of inflation" around the world, Çakar noted, adding that there is a serious slowdown in the global economy and growth has become a problem.

“Türkiye, on the other hand, has always been positive in terms of growth,” he added.

“In my opinion, we should never be in a hurry with the current policy. I think it is already normal for inflation to come down to 40-45 percent, it will happen. The important thing is to reduce inflation before it becomes sticky and permanent. It is important that we are more careful there and that we continue the current policy with more maturity.”

Çakar said that the interest rate policy is being implemented effectively and that quantitative tightening will continue.

“I believe that the Central Bank will complete the process of raising interest rates by January,” he said.

“We can say that the process of raising interest rates around the world has come to an end. I think that when they cut interest rates, we will follow them in the light of macro data. It is not right for me to give a calendar, but I think we will also move towards the rate cut process towards the last quarter.”

“I think there will be capital flows from the U.S. and Europe to Türkiye with interest rate cuts. This will reduce the pressure on the exchange rate.”