Inflation will start to fall in December, says Nebati

ISTANBUL

The increase in consumer prices will be lower in August, and inflation will start to ease in December, Treasury and Finance Minister Nureddin Nebati has said.

“We have not compromised on economic growth. That is why the fight against inflation is taking some time,” Nebati said in a televised interview on Aug. 3.

Unless something extraordinary happens, inflation will begin to come down in December due to the base effect and the easing of oil prices and the decline will become more apparent in January-March next year, the minister added.

“We are taking important steps to bring inflation under control, and the markets have been seeing the effects of those measures over the past two months. Inflation came in at 2.37 percent [in July], and the rate of inflation will be lower than this in August.”

Nebati recalled that the Food Committee convened earlier this week for its regular monthly meeting to assess the course of local food prices in the light of the developments in the global prices and harvest in Türkiye.

“We are preparing for winter. Steps have been taken to boost the stocks of wheat and barley. The Energy Ministry is filling up the natural gas storage facility in Tuzla. Meanwhile, inspections on prices are continuing,” Nebati said.

The monthly inflation growth eased from 2.98 percent in May and 4.95 percent in June to 2.37 percent in July, the latest data from the Turkish Statistical Institute (TÜİK) showed.

The annual inflation rate accelerated from 78.62 percent in June to 79.6 percent last month.

Foreign direct investments

Türkiye is attracting foreign direct investments, and inflows into the country gathered momentum last week, and this trend will continue, the minister said, adding the Central Bank’s data will show those inflows.

“Türkiye is a safe country. Foreign direct investments will help fully meet the current account deficit.”

Nebati recalled that, at the start of the year, there were expectations that the current account would produce a surplus. “But currently we have a deficit, and the main reason for this is energy. We are the net importer of energy.”

If the current prices maintain their course until the end of the year, Türkiye’s energy imports may face a large energy import bill.

The minister also said that the amount of money collected under the FX-protected deposit account scheme (KKM) exceeded 1.1 trillion Turkish Liras, adding that the KKM helped ease demand for foreign currencies.