Fiscal discipline will be maintained, vows minister

GAZİANTEP

Turkey will maintain fiscal discipline while continuing to implement practices to provide support to low-income people, Treasury and Finance Minister Nureddin Nebati has said.

Speaking to businesspeople in the southeastern province of Gaziantep, Nebati dismissed suggestions that the public finances deteriorated.

“On the contrary to some people who try to present a gloomy picture on social media, our public finances are strong as the latest figures showed,” the minister said, referring to the 149.2 billion Turkish Liras of surplus the cash budget posted in May.

He reiterated that the fight against inflation remains a top priority, citing reductions in the value-added tax to support people’s purchasing power.

“We slashed the VAT in food to 1 percent…In 2022, we are giving up on 239 billion liras in tax revenues as part of efforts to fight inflation. We also gave up on 154 billion liras in tax revenues to contain the impact of the pandemic,” Nebati said.

The fight against inflation will continue with determination in the coming period, with decisions to be taken by the Food and Price Commission, the minister added.

He also said the government has offered appealing alternatives to those who keep their savings in lira, including the recently announced revenues-indexed domestic bonds.

“The yield of these bonds is indexed to the revenues of state-owned enterprises General Directorate of State Airports Authority (DHMİ) and General Directorate of Coast Safety (KIYEM), which are transferred to the state’s budget. The annual compound yield of the bonds, which will be offered this month, is 23.04 percent,” Nebati explained.

The Treasury and Finance Ministry announced on June 10 that demand for the revenue-index borrowing instrument will be collected between June 15 and June 22 through state-owned lenders Ziraat, Halkbank and Vakıflar.

The Turkish economy is a liberal economy and continues to grow in a sustainable way under free-market rules, the minister also said, noting that the growth was 11 percent last year despite the pandemic, which was the largest expansion in the past 10 years.

Separately, Nebati wrote on Twitter on June 10 that with the introduction of the exclusive swap instrument for the non-residents, they will expand non-residents’ access to Turkish Lira assets to be used in specific areas.

“Acting through free-market principles, Türkiye will continue to provide an efficient, reliable and long-term investment environment for international investors via this facility. Türkiye will continue to remain a center of attention for international investors,” he tweeted.