Türkiye aims for permanent single-digit inflation: VP Yılmaz

ISTANBUL

Türkiye’s primary goal is to bring inflation down to single digits permanently and ensure stable economic growth, Vice President Cevdet Yılmaz stated at the 28th International Business Forum (IBF), organized by Türkiye’s Independent Industrialists and Businessmen's Association (MÜSİAD).

“Our main objective is to achieve permanent single-digit inflation, ensure price stability, foster stable growth and distribute income fairly,” Yılmaz said.

Despite global challenges, Yılmaz highlighted that the world economy grew by 3.3 percent in 2023, with growth projected to moderate to 3.2 percent in the coming years.

“We anticipate accelerated growth in regions such as Europe, the Middle East and North Africa, which account for 72 percent of Türkiye’s exports, by 2025,” he added.

Yılmaz acknowledged the slowdown in global trade in 2023, which grew by merely 0.8 percent due to protectionism and geopolitical tensions. However, he noted a positive outlook for global trade with projected growth of 3.1 percent in 2024 and 3.4 percent in 2025.

Global financial conditions are also expected to improve, with easing measures seen in the latter half of 2023.

“Markets foresee continued interest rate cuts by the U.S. Federal Reserve and European Central Bank through 2025. This creates a favorable environment for developing countries,” Yılmaz emphasized.

Under the motto of “balanced trade — sustainable economy,” Türkiye aims to leverage such conditions in the global economy. Yılmaz stressed the importance of prioritizing cooperation in the multilateral trade system to drive progress.

He further affirmed that the MÜSİAD Expo 2024 will play a significant role in fostering collaborations and investments. Held in Istanbul, the event aims to facilitate $1 billion in trade volume through business-to-business (B2B) meetings.

As in previous years, this year's IBF is being held concurrently with the MÜSİAD International Trade Expo.

The expo will host attendees from 88 countries and over 300 firms across 24 sectors. Key highlights include a G20 panel, diplomatic sessions, the Türkiye-Iraq Business Forum and MÜSİAD's networking programs.

The final day will feature B2B meetings, country presentations, and the signing of memorandums of understanding.

“In summary, global growth, trade and financial conditions in the upcoming period are expected to be more favorable for Türkiye’s economic landscape,” Yılmaz concluded.

Inflation expectations improve across sectors

Meanwhile, Türkiye’s Central Bank announced a decrease in 12-month-ahead annual inflation expectations for November among market participants, the real sector and households.

The Central Bank released its “Sectoral Inflation Expectations” report for November 2024, based on data gathered through surveys conducted in cooperation with the Turkish Statistical Institute (TÜİK).

According to the report, inflation expectations for the next 12 months decreased by 0.2 points to 27.2 percent for market participants, by 1.7 points to 47.8 percent for the real sector, and by 3.1 points to 64.1 percent for households. However, the proportion of households expecting a decrease in inflation over the next year dropped by 2 points compared to October, standing at 26.3 percent.

Finance Minister Mehmet Şimşek commented on the report via his social media account.

“The disinflation process positively affects inflation expectations across all segments,” Şimşek stated.

Highlighting the progress since May, when inflation peaked, he noted improvements of 12 points in household expectations, 8.2 points in the real sector and 6 points for market participants.

“This improvement in expectations supports the decline in inflation rigidities,” he added.