Gov’t aims to bring inflation under control this year: Şimşek

ANKARA

One of the main pillars of the medium-term program is to establish the disinflation course, Finance Minister Mehmet Şimşek said, adding that they aim to bring inflation under control this year and lower it to single digits in 2025-26.

The program was formally unveiled in September, but they actually began to implement it starting in June, Şimşek said in an interview with public broadcaster TRT Haber on Nov. 30.

The most important component of the economic program is disinflation and price stability, he stressed.

“We made improvements in monetary policy against the deteriorating pricing behavior. The Central Bank is doing what is necessary about it.”

The annual inflation rate slowed from 61.53 percent in September to 61.36 percent in October with the monthly increase in consumer prices easing from 4.75 percent to 3.43 percent.

The government is also working to establish the fiscal discipline despite the fallout of the earthquakes, which hit 11 provinces in February, Şimşek said, noting that the budget deficit is forecast to widen to 6.4 percent of GDP.

“Our revenue performance is much stronger. We are also very frugal regarding expenditures. Thus the budget deficit may be slightly lower than envisaged in the program,” he added.

Another main target of the program is undertaking structural reforms, which will bolster Türkiye’s competitiveness, according to the minister.

The FX-protected deposit account (KKM) should phase out, Şimşek also said.

“We have started to work on it. We are making progress in reducing KKM and may take more measures in the period ahead,” he said, without providing details.