Şimşek urges businesses to follow medium-term program

NEW YORK

Finance Minister Mehmet Şimşek has announced that inflation in Türkiye is projected to drop below 20 percent next year and to single digits the following year, urging the business community to consider the Medium-Term Program in their financial calculations.

"The disinflation process has begun in a permanent way. On the one hand, inflation will fall sharply in 2025 with the lagged effect of monetary policy. On the other hand, fiscal policy, revenue policy, will become more supportive,” Şimşek said on Sept. 24, speaking at an event organized in New York by the Anatolian Lions Businessmen Association’s (ASKON) U.S. branch.

“I would like to address businesspeople in particular: If you make your calculations accordingly, from your inventories to your pricing policy, you will not be on the wrong side,” Şimşek added.

“Inflation is coming down. So it would be in your interest to take our targets into account. This year we have put a band around inflation and we have met many of our targets, even in a difficult year with an election and geopolitical turmoil at its peak. We expect the business community to use the Medium Term Program as a guide.”

Şimşek said that Türkiye had a serious current account deficit a year ago and that with the measures taken, the current account deficit fell from around $57 billion to less than $20 billion.

"The current account deficit is no longer a source of fragility and concern," he said.

Recalling that the shortage of reserves was also a source of concern last year, the minister said that solving this problem was one of the priority goals and that net reserves had improved by about $95 billion as of last week.

Şimşek explained that the improvement in reserves is a reflection of the strong confidence in the program.

"There is a lot of interest in the program from both inside and outside. Therefore, Türkiye has removed the issue of reserves as a source of concern," he said.