Economic board: Inflation will fall rapidly

ANKARA

The disinflation process will start in June and annual inflation will decline rapidly in the second half of the year, the Economy Coordination Board (EKK) has said, adding that the main priority is to ensure price stability to achieve lasting welfare gains.

"The first year of the economic program is behind us and the results so far show that we are on the right track," the board said after its fifth meeting of the year on June 25.

"During this period, employment has reached historically high levels, the unemployment rate has continued to decline and is now in the single digits, and we have moved toward more balanced growth," it added.

The meeting was chaired by Vice President Cevdet Yılmaz and attended by Labor Minister Vedat Işıkhan, Energy Minister Alparslan Bayraktar, Finance Minister Mehmet Şimşek and Industry Minister Mehmet Fatih Kacır, among others.

The government's current economic program has helped narrow the current account deficit significantly, strengthen foreign exchange reserves and reduce the country's risk premium, the EKK statement said.

"Our main priority is to ensure price stability in order to achieve sustainable welfare growth and further improve the investment climate," the statement said.

"The disinflation process will start in June, and annual inflation will decline rapidly in the second half of the year. Market inflation expectations also confirm this. Fiscal discipline, which we will further strengthen with the savings and efficiency package in the public sector, will continue to support the disinflation process."

The statement also noted that green and digital transformation efforts, which are at the heart of the 12th Development Plan, are being accelerated.

"We are implementing new industrial policies to ensure the dual transformation," it added.

"We will continue to increase value-added production and productivity by supporting qualified investment and the export of high-tech products."

Other issues were also on the meeting’s agenda, the EKK said.

"Efforts to realize the green transformation of industry were discussed in the context of the National Emissions Trading System and the Border Carbon Regulation Mechanism, which will be established to protect and strengthen our international competitiveness,” the board said.

“The status of the restructured Investment Commitment Advance Credits [IAC] for high value-added investments, which will increase our export potential and ensure a sustainable improvement in the current account balance, was assessed. The impact analysis study on employment incentives was shared with the Board members. Steps to be taken to review the incentives and increase the effectiveness of the system in the coming period were discussed. The latest status of the ‘Digital Turkish Lira Project’ and the ‘Social Investment Grade’ studies to be provided to banks were reviewed.”