Şimşek sees inflation falling to around 30 percent in early 2025

ANKARA

Türkiye’s annual inflation will decline around 30 percent in the first quarter of 2025, before easing further down to the 20 percent range in June or July, Finance Minister Mehmet Şimşek has said.

“I sincerely believe that by the end of 2025, we will be able to reduce inflation to below 20 percent,” Şimşek said in an interview with private broadcaster CNN Türk.

The minister said he understands the hesitations about the economic program the government is implementing. “But we believe our program will produce results,” he added.

The annual inflation rate has slowed from 61.78 percent in July to 51.97 percent in August with consumer prices advancing 2.5 percent monthly.

The economic program has the strong support of President Recep Tayyip Erdoğan, according to Şimşek.

The current account deficit has declined significantly, this is one of the main gains of the program, the minister said, noting that the deficit fell from $57 billion in May last year to $19 billion.

“This reduced our need for external resources and reduced external vulnerabilities.”

Şimşek also said that gross international reserves rose from around $98.5 billion in May 2023 to more than $153 billion as of Sept. 13.

Türkiye has entered a period of “mild economic growth,” according to Şimşek.

“But in the medium and long term, Türkiye will be back on a high growth path with disinflation,” he said.

The annual GDP growth slowed from 5.3 percent in the first quarter of 2024 to 2.5 percent in the second quarter. The economy expanded by 0.1 percent quarter-on-quarter in the April-June period.

With prudent expenditure policies, the public savings are expected to be around 657 billion Turkish Liras in 2024, according to Şimşek.

The deviation from projected expenditures was 9.5 percent in the last 10 years, but this rate will be below 1 percent, Şimşek said.