Inflation on downward trend, says finance minister

ANKARA

Inflation that slipped in November will continue its downward trend, Treasury and Finance Minister Nureddin Nebati has said.

“We have entered a path where inflation will exhibit declines each month,” Nebati told lawmakers in parliament, where he presented his ministry’s budget.

Both consumer and producer prices will continue to decline in the period ahead due to the improvements in expectations as well as in global commodity prices and FX rates, the minister said, recalling that the annual inflation slowed last month.

“The fight against inflation is our priority. We are effectively utilizing revenue and spending policies in order to protect our citizens’ purchasing power against inflation.”

The consumer price index rose 84.4 percent in November compared with the same month a year ago, down from an 85.5 percent increase in October. On a monthly basis, inflation eased from 3.5 percent in October to 2.9 percent last month.

Nebati also said the FX-protected deposit scheme, KKM, has played an important role in maintaining financial stability. “Some 2.2 million depositors have around 1.5 trillion Turkish Liras in the KKM.”

The cost of the KKM scheme is declining, the minister said, adding that from January to October, 91.6 billion liras were transferred from the budget to the KKM scheme, but there were no transfers in the months of November and December thanks to the stability in FX rates.

He also noted that despite the revenues from exports and tourism, the current account deficit increased because of the energy and gold imports.
“The annualized deficit was $43.5 billion as of October. Excluding energy and gold, the current account posted a surplus of $49 billion. Despite the strong [economic] growth, this surplus was achieved thanks to the Türkiye Economy Model,” he said.