Economy program aims at fiscal discipline, stability, fighting inflation: Şimşek

ANKARA

Treasury and Finance Minister Mehmet Şimşek has revealed that the government’s economy program will focus on three main factors with an aim to fight inflation and bring financial stability to the country.

Şimşek said that the first component is “reestablishing the fiscal discipline that is reducing the budget deficit to a level compatible with the Maastricht criteria, excluding the impacts from the earthquakes,” in a statement he made on Twitter on July 6.

The second component of the economy program is gradual monetary tightening and incomes policy in line with the inflation target in order to reduce inflation to single digits in the medium term, and the third component is structural reforms that will make macro-financial stability and all other gains made permanent, Şimşek said.

Şimşek took the helm of the economy after the May elections. In a cabinet reshuffle, President Recep Tayyip Erdoğan appointed Şimşek as the Treasury and Finance Minister to replace Nureddin Nebati.

Şimsek, well-respected by international financial markets, previously served as finance minister and deputy prime minister between 2009 and 2018 in Erdoğan governments.

“Türkiye has no other choice but to return to a rational ground. A rule-based, predictable Turkish economy will be key to achieving the desired prosperity,” Şimşek earlier last month when he took over the job from Nebati.

In another move, Erdoğan appointed Hafize Gaye Erkan as the Central Bank governor.

Shortly after Erkan’s appointment, Central Bank’s Monetary Policy Committee members gathered on June 22 for a rate-setting meeting. At this meeting, the bank raised the policy rate - the one-week repo auction rate - from 8.5 percent to 15 percent, the first hike in the bank’s interest rate since March 2021.