Şimşek confident decline in inflation will continue

ŞANLIURFA

The inflation is declining and will continue to fall, Finance Minister Mehmet Şimşek said, adding that the moves on tobacco and fuel tax will not put inflation at risk.

Speaking to a group of reporters in the southeastern province of Şanlıurfa, Şimşek recalled that annual inflation rates were at 64 percent at the end of 2022 and at 65 percent at the end of 2023.

Inflation will be around 44 to 45 percent at the end of 2024, according to Şimşek.

The annual inflation rate slowed from 48.58 percent in October to 47.09 percent in November.

The Turkish Statistical Institute (TÜİK) will release inflation data for December on Jan. 3.

The lagged effects of monetary policy, the narrowing budget deficit, and the cautious approach toward administered prices will help inflation decline in 2025, the minister said.

“We are paying utmost attention regarding administered prices. For instance, natural gas and electricity prices were hiked around 34 percent in 2024, which was inline with the Central Bank’s initial inflation target,” Şimşek explained.

“We will have a similar approach in 2025. Regarding the special consumption tax on fuel and tobacco prices, we will take an approach which will not jeopardize the inflation target,” the minister said.

The target is to lower the budget deficit from 5 percent (of GDP) to around 3 percent in 2025, Şimşek also said.

“Thus the impact of the narrower budget deficit on disinflation will become more visible,” he added.