Economic program aims to lower inflation to single digits: Şimşek
ANKARA
The government’s new medium-term program aims to lower inflation to single digits, Finance Minister Mehmet Şimşek has said, noting that the other two main pillars of the program are fiscal discipline and reforms.
In the economic program, announced last week, the government forecasts that annual inflation will gradually decline from a projected 65 percent in 2023 to 8.5 percent in 2026.
The most important components of the program are disinflation and price stability, Şimşek said in an interview with private broadcaster NTV on Sept. 11.
“It will be a difficult process, but not impossible. We succeeded in the past, and we will succeed again,” the minister said.
Şimşek reiterated that the February earthquakes adversely affected the budget balance. The government aims to keep the budget deficit, excluding quake-related spending, below 3 percent of GDP, while establishing fiscal discipline, he added.
The program is also designed to heal the wounds from the earthquake, Şimşek said, noting that for this, $8.5 billion worth of bond issuance is on the agenda. The bond issuance may take place by the end of the year, according to the minister.
Also, there will be another bond issuance this year worth $3.5 billion for the financing of exports, the minister said.
“We need to focus on the revenue side. We will seek revenues outside the budget, including privatization,” Şimşek said without providing details.
There is an exit strategy for the forex-protected deposit scheme, known as KKM, the minister also said, adding that the exit will be gradual.
The KKM has reached a size that may affect financial stability, he noted.
Loan growth should be brought under control, according to Şimşek. “We should have a domestic consumption growth consistent with the target of lowering inflation to single digit," he said.
