Mehmet Şimşek gives a date: Inflation will start to fall on that date

Minister of Treasury and Finance Mehmet Şimşek met with investors in New York and delivered important messages regarding the future of the Turkish economy. Şimşek stated that the current account deficit has been brought under control and that inflation will fall below 20 percent in 2024.

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Mehmet Şimşek gives a date: Inflation will start to fall on that date

Minister of Treasury and Finance Mehmet Şimşek, who accompanied President Recep Tayyip Erdoğan in New York to attend the 79th United Nations (UN) General Assembly, shared future targets for the Turkish economy in a presentation to investors.

Highlighting the steps taken within the framework of the Medium-Term Program (MTP), Şimşek drew attention to the progress made in combating the current account deficit and inflation.

CURRENT ACCOUNT DEFICIT HAS DECREASED

Minister Şimşek recalled that Turkey had a serious current account deficit problem a year ago and emphasized that with the measures taken, this deficit has fallen from 57 billion dollars to below 20 billion dollars. Şimşek said, "The current account deficit is no longer a source of vulnerability and concern. More measures are needed, but as of today, we are at a manageable level."

WE ARE STRENGTHENING THE FOUNDATIONS

Stating that Turkey's lack of reserves was also a serious source of concern last year, Şimşek said they have taken steps to solve this problem.

Expressing that an improvement of around 95 billion dollars has been recorded in net reserves, Şimşek said, "This improvement in reserves is a reflection of the strong confidence in the program. Turkey has now left the reserve problem behind."

Şimşek also said that Turkey has experienced a major improvement in access to external financing and that the foundations for healthy, sustainable growth have been strengthened. "There may be a temporary slowdown, but this will strengthen Turkey's structure," he said.

INFLATION WILL FALL

Acknowledging that inflation is still high, Şimşek stated that inflation will fall below 20 percent for 2024 and will decline to single-digit levels in 2025. Expressing that the disinflation process has permanently begun, Şimşek said, "With the lagged effect of monetary policy and the supportive effect of fiscal policy, inflation will fall strongly in 2025."

Addressing the business world, Şimşek stated that they should be careful with stock and pricing policies, adding, "Inflation is coming down. It will be in the business world's own interest to take the Medium-Term Program as a guide."

COMBATING THE INFORMAL ECONOMY

Şimşek stated that they have taken savings measures in addition to tax measures to reduce the budget deficit. Emphasizing that they will prioritize combating the informal economy rather than increasing tax rates in the coming period, Şimşek stated that informality creates injustice. "If you are informal, know that the tax office will knock on your door." he said.

Stating that taxpayers in Turkey will be subject to audits every year, Şimşek said, "Cross-audits will be conducted with tax avatars, and a fair competitive environment will be ensured."

Stating that there is a significant improvement in the current account deficit, Şimşek expressed that they aim to make this improvement permanent by initiating a structural transformation process. Emphasizing that natural gas and oil production will play an important role in this process, Şimşek said that Turkey could move from a current account deficit to a current account surplus with green transformation and new industrial policy.

News Source: 12punto