Finance Minister Albayrak projects single-digit inflation

TRABZON

Turkey’s inflation rate will again drop to single-digit levels by the end of the summer months, according to Treasury and Finance Minister Berat Albayrak.

The inflation rate has already decreased from nearly 30 percent to 18 percent today, the finance minister noted.

“I say it very clearly, in three months, around September and October, we will most probably see single-digit inflation again,” Albayrak said on June 6 in the Black Sea province of Trabzon.

“What does this mean? The interest rates will drop similarly. Lower interest rates mean easier financing for the business world, which will strengthen their investments. We will take stronger steps from now on, our path is clear.”

Turkey saw an annual hike of 18.71 percent in consumer prices in May, the Turkish Statistics Institute (TÜİK) reported on June 3.

According to the latest inflation report by the Central Bank, the year-end annual inflation would be 14.6 percent, hovering between 12.1 percent and 17.1 percent.

The government said in the New Economic Program, released in September, its inflation rate target is 15.9 percent this year, 9.8 percent next year and 6 percent in 2021.

Albayrak said the Turkish economy has come a long way in the last six years, arguing that the Gezi protests in 2013, followed by the Dec. 17-25, 2013 graft probes and the failed coup attempt in 2016 took their toll on the economy.

“Each and every one of those were used as an economic weapon targeting the interest rates and inflation,” he said. “The last operation started 10 months ago directly targeting our economy.”

Albayrak also said a chronic economic problem - current account deficit - may soon be over.

“We always hear, what is current account deficit?” Albayrak said.

“Current account deficit is the difference between what your economy produced and what it consumed. So, if you consume more than you produce, you need money from abroad, you need to find financing. As of May last year, Turkey’s current account deficit was $58 billion. At this point, hopefully, as of June, the Turkish economy will have current account surplus for the first time in the 17 years of the AK Party [ruling Justice and Development Party] era. The winter months were the worst [for the economy], and now they are behind us.”

The effects of the “foreign-sourced attacks on the economy” are vanishing, and the economy is getting stronger, Albayrak asserted.

“Inflation and interest rates, these are the last [remaining problems],” he said.