Fiscal policy to support Central Bank’s fight against inflation: Şimşek

WASHINGTON

Treasury and Finance Minister Mehmet Şimşek has said they will continue to support the Central Bank’s fight against inflation with fiscal policy.

The economic program aims to restore price stability and fiscal discipline while addressing macroeconomic challenges, such as reducing the current account deficit, Şimşek stressed.

“We will strengthen the program to support the Central Bank’s efforts to bring inflation down,” said Şimşek at an event on the sidelines of the International Monetary Fund/World Bank spring meetings in Washington.

“We just have to convince locals that inflation is going to fall,” he said.

The annual inflation rate accelerated from 67 percent in February to 68.5 percent in March. But, the monthly inflation slowed from 6.7 percent in January and 4.5 percent in February to 3.2 percent last month.

A recent survey by the Central Bank showed that the 12-month inflation expectation is 36 percent, while the inflation expectation for the end of 2024 is 44.2 percent.

The ultimate goal of the economic program is to achieve sustainable high growth rates, the minister added.

“We will speed up structural reforms going forward, and there is strong interest in Turkish assets,” Şimşek also said, noting that foreign investors’ perspectives on Türkiye have changed compared to last year.

“Last year, investors had doubts about the possibility of stepping back from orthodox policies and not implementing the program,” he noted.

Şimşek said that at the meetings with investors this year, he did not receive such questions from investors.

There will be no elections until June 2028, which will give plenty of time in terms of political stability, he stressed.