Cevdet Yılmaz announces the date when inflation will fall to single digits

Vice President Cevdet Yılmaz, speaking at the opening of the budget negotiations that began in the Grand National Assembly of Turkey (TBMM), provided information regarding economic developments. 

Yılmaz stated the following:

"The 2024 Central Government Budget Law Proposal and the 2022 Central Government Final Account Law Proposal were submitted to our Honorable Assembly by our President and have been accepted after intensive work in the Planning and Budget Committee. We have begun the General Assembly deliberations for the 2024 Budget, which was prepared with a holistic development approach in line with our 2053 vision, while observing the targets and policies of the Medium-Term Program and the Twelfth Development Plan.

We will use our 2024 budget to fulfill the promises we made to our nation in strategic areas such as the national technology initiative, energy and food supply security, and green and digital transformation. We will support our production ecosystem by standing by our real sector in every field, especially in breakthrough technologies. We will continue to protect the environment of peace and security in every corner of our country.

By protecting our rich culture and values, we will strengthen our family institution and protect our generations against harmful trends. As a country that determines global and regional balances, we will continue our active role in diplomacy. We will continue to implement our economic policies with strong coordination and determination. We will improve the investment environment and further strengthen the climate of trust and stability.

INFLATION WILL BE BROUGHT BACK TO SINGLE DIGITS IN 2026

With transparent and reliable coordination between monetary and fiscal policies, a significant decline in annual inflation is expected after the second half of 2024, and a permanent disinflation process is envisioned from this period onwards. Indeed, the current data released shows that a downward trend has begun in recent months.

While the average of the monthly inflation rates announced in 2022 was at the level of 4.26 percent, the average of the monthly inflation rates announced in the last three months is at the level of 3.82 percent. We anticipate that this rate will fall even further as inflation rates are announced in the coming months.

In this process, by ensuring the continuity of our disinflation policies, a period of stability will be entered in 2025; the decline in inflation will gain momentum, predictability will increase, and inflation will be brought back to single digits in 2026. In this direction, we will continue to implement all policy tools decisively to bring inflation down to stable and single-digit levels.

“A PERIOD OF STABILITY WILL BE ENTERED IN 2025”

Indeed, the current data released shows that a downward trend has begun in recent months. While the average of the monthly inflation rates announced in 2022 was at the level of 4.26 percent, the average of the monthly inflation rates announced in the last three months is at the level of 3.82 percent. We anticipate that this rate will fall even further as inflation rates are announced in the coming months. In this process, by ensuring the continuity of our disinflation policies, a period of stability will be entered in 2025; the decline in inflation will gain momentum, predictability will increase, and inflation will be brought back to single digits in 2026.

OUR RESERVES HAVE REACHED RECORD LEVELS

Our labor markets maintain their positive outlook. Unemployment rates continue to decline. The unemployment rate has fallen to 8.5 percent, the lowest level in 11 years. I can state that for the whole of 2023, the unemployment rate will be in single digits, below the 10.1 percent projected in the Medium-Term Program (OVP)."

Investor confidence has increased recently, and the CDS premium has begun to fall significantly. Central Bank reserves have reached historical record levels at 140.1 billion dollars. Despite ongoing geopolitical risks, the CDS premium has fallen below 350 basis points. An upward trend has been observed in the share of TL deposits in the last 5 months."

News Source: 12punto