Gov’t vows to ensure supply security amid high inflation

ANKARA

In its fourth meeting, the Price Stability Committee vowed to fight soaring inflation rates with “new policies to achieve security of supply against excessive price hikes,” according to a statement released by the Treasury and Finance Ministry late on April 5.

Protective policies around the globe, particularly in the agricultural sector, have raised security of supply risks, the statement added.

The committee also decided to prepare new legal frameworks on securing agricultural product, food, energy, commodity and water supplies.

Labor and Social Security Minister Vedat Bilgin, Energy and Natural Resources Minister Fatih Dönmez, Industry and Technology Minister Mustafa Varank, Agriculture and Forestry Minister Vahit Kirişci, Presidential Strategy and Budget Office head İbrahim Şenel and Turkish Central Bank chief Şahap Kavcıoğlu attended the meeting chaired by Treasury and Finance Minister Nureddin Nebati.

With the new economy policies, “all stakeholders will act in coordination to fight against inflation to the end,” said Nebati in a tweet.

The finance minister also spoke during a fast-breaking, or iftar, dinner hosted by the Independent Industrialists and Businessmen’s Association (MÜSİAD) in Ankara on April 5.

After the stabilization of the exchange rates and fixation of the key interest rate at 14 percent, the government now will focus on soaring consumer and producer prices, he said.

“We will break the inflation inertia, which has occurred with the deterioration of expectations, with alternative investment tools. We will see that the inflation rate will fall to a reasonable level at the end of the year, and the decline will continue,” Nebati said.

The Turkish Statistical Institute (TÜİK) reported on April 4 that the annual consumer price inflation advanced from 54.4 percent in February to 61.1 percent in March. Consumer prices increased by 5.46 percent in March on a monthly basis.

Saving accounts created under a scheme to support the Turkish Lira - FX-protected deposit accounts - have amounted to 695 billion liras ($47.2 billion) as of April 1. Since the scheme was introduced in late December, the lira gained strength against the U.S. dollar from around 18.40 to 14.73 yesterday.

The Turkish government’s new approach, dubbed as Turkey Economy Model, prioritizes a current account surplus, increasing exports, GDP growth and expansion in employment, while keeping interest rates low.

Turkey’s exports rose by 19.8 percent on an annual basis to climb to $22.7 billion in March, data from the Trade Ministry have shown. The government aims for an annual exports level of $250 billion this year.

Exports rose to $225.3 billion in 2021 with an increase of 32.8 percent, while its imports increased by 23.6 percent to $271.4 billion.

Meanwhile, Vice President Fuat Oktay said in a speech during the dinner that significant decreases in value-added-tax rates will help the fight against inflation.