Türkiye's inflation transition ending, says Şimşek

ISTANBUL

Türkiye's sole focus is now on price stability, Treasury and Finance Minister Mehmet Şimşek has announced, projecting September inflation to potentially reach 40 percent.

"The inflation transition period ends this month, marking the start of the disinflation process. We anticipate seeing inflation in the 40s by September," Şimşek said on Wednesday at the “Fighting Inflation and Central Banking” panel in Istanbul.

"We're on track with our monthly inflation targets, though the market may not fully reflect this yet. We believe it's manageable and will take additional steps if necessary. We're determined to bring the fiscal deficit below 3 percent next year," he said.

Şimşek affirmed that the Central Bank is utilizing all its tools to achieve price stability and is confident in its success.

"If our Central Bank needs it, the Treasury and Finance will borrow to attract liquidity beyond our needs, as we occasionally do," he added.

The minister also expressed confidence in the government's economic policies and highlighted an improvement in inflation expectations.

"With the performance of the program, both our citizens and market players are becoming more optimistic. In the coming months, we will see inflation expectations approaching the targets," he said.

Şimşek reiterated the government's commitment to stability and disinflation, stating, "The beginning of this program implements structural changes in line with the rules. Our goal is stability, along with real exchange rate appreciation. This will lead to disinflation. We want an environment where domestic demand contributes to growth without creating imbalances. The program is working."