Prices to ease after April, minister says

ANKARA

Inflation rates in Turkey could peak in April before falling to single digits by the June 2023 general election, Treasury and Finance Minister Nureddin Nebati told Nikkei Asia in an interview published on Feb. 3. 

“For the coming period, there won’t be many more price hikes from government side. We have one final natural gas price correction by the government and food prices tend to go up during month of Ramadan [in April this year],” he said.
“I do not think we will see 50 percent. I hope I am not wrong,” he added.

Nebati said Turkey has a “serious inflation problem ahead of us,” but added that the rest of the world is experiencing similar problems.

“We expect high month-on-month inflation to peak in January, and then it will keep its level for some time. In the summer it will start to show recovery and will radically decline in December due to the base effect,” he said.
Nebati added that he expected the Turkish Lira to stabilize this year after months of turbulence.

“As the lira significantly lost its value around 45 percent last year, we do not expect further negative developments in the lira, hence we do not expect further depreciation,” Nebati said. “There will be no imbalance between the forex rate when I was appointed and the forex rate at the end of this year. To sum up, there will be no pessimism in Turkey regarding forex rates.”

Nebati also estimated that gross domestic product growth last year was “expected to be between 10 percent to 11 percent, above the medium-term economy program forecast,” while the economy’s expansion in 2022 “is expected to be around the medium-term economy program forecast of 5 percent.”

The government’s measures, announced on Dec. 20, 2021, helped to stabilize the lira at around 13.3 to 13.5 to the dollar so far this year.

Nebati said that the new Turkish Lira deposit scheme reached a total size of more than 272 billion liras (about $20 billion), with 113 billion liras coming from conversions from forex accounts. Turkey’s total deposit volume is more than 5.3 trillion liras.