Vice President Cevdet Yılmaz: It is necessary to sacrifice some growth while lowering inflation

Vice President Cevdet Yılmaz made several statements regarding the current agenda and touched upon the newly announced Medium-Term Program (OVP).

Responding to claims that there are contradictions in the growth and inflation targets in the new OVP, Yılmaz said, "When you lower inflation, you have to suppress demand to some extent. This situation also reflects on growth. There is an approach that suggests it is necessary to sacrifice some growth while lowering inflation," he said.

Highlights from Yılmaz's statements are as follows:

"We do not act with impulsive decisions. The enemy of the economy is uncertainty, whether it be political or policy-related. We are in a lucky period. We have entered a long period without elections. This year's OVP is a continuation of last year's program. Whatever our fundamental goals were last year, we are maintaining these fundamental goals as we update them. However, we have updated our estimates and budget figures. Among our primary objectives, the first goal of the OVP is to bring inflation back down to single digits and ensure price stability. The second is growth, the third is to heal the wounds of the earthquake disaster experienced last year, and the fourth is to create permanent prosperity.

'THERE IS NO CONTRADICTION BETWEEN GROWTH AND INFLATION'

You may experience short-term difficulties while lowering inflation, but fundamentally, there is no contradiction between growth and inflation. While Turkey is gradually lowering inflation on one hand, it is succeeding in maintaining a certain level of growth on the other.

Another important issue is the composition of growth. It is possible to achieve growth in different ways. You can grow through consumption. This creates a more inflationary environment. You can also grow through production. This second channel supports the disinflation policy. We have a goal of growth through production, not consumption. We want to spread the benefits of growth to all segments of society. Especially as the burden of the earthquake lightens, we will focus more on these priorities.

'OUR GOAL IS TO LOWER INTEREST RATES'

The expectation from the US Federal Reserve (Fed) and the European Central Bank (ECB) is that they will lower interest rates. This will have reflections on us and the developing world. It will be positive. We will be entering a period where global liquidity increases, and there will be fund flows toward developing countries.

We will also receive a share of this. As for the decisions to be taken by our Central Bank, let me state this: the Central Bank has instrument independence. Our political goal is to lower interest rates. Our plan and program are clear. The Central Bank has instrument independence within the framework of these goals. What will it look at? It will look at how inflation is progressing and how expectations are developing. It would not be right to comment too much on that, but our political framework is clear. We are aiming for a more stable Turkey."