Economists weigh in on the MTP: 'There isn't even an apology if the target isn't met'

The 3-year roadmap for the Turkish economy has been announced. Vice President Cevdet Yılmaz, who made statements on the subject, noted that the 2024 inflation target has been revised to 41.5 percent, the 2025 inflation target, which was set at 15.2 percent last year, has been raised to 17.5 percent, and the target for 2026 has been increased to 9.7 percent from the previous 8.5 percent.

Economists have since commented on the decision.

Former CBRT Chief Economist Hakan Kara noted the following in his assessment on X:

'I HOPE TO SEE A MORE REALISTIC TARGET'

Former CBRT Chief Economist Hakan Kara noted the following in his assessment on X:

"I am being asked about my expectations regarding the outlook in the MTP. To be honest, I don't have many. Growth targets are already more of a wish than a forecast. The exchange rate projection is made with a mechanical assumption. The only part I will take seriously is the inflation target. I hope to see a more realistic target.

One of the mistakes we have made in the last 20 years has been to view fiscal policy as consisting solely of the budget balance. The day we learn that a budget policy based primarily on public price hikes and indirect tax increases is not a feat, we will achieve price stability.

In this context, I would sign off on the framework presented below in the MTP. Our problem is not that we don't know what needs to be done, but that we cannot implement it."

'I FOUND THE FORECASTS INCONSISTENT'

Economist Serkan Özcan said, "I found the inflation forecasts for 2025-2027 in the MTP to be overly 'ambitious.' Looking at these inflation forecasts, I found the growth forecasts for the same period to be 'inconsistent.' Even in a composition where wages are suppressed for a long time, credit constraints continue, and interest rates remain high for much longer than estimated, it is quite difficult to achieve these inflation levels. If the inflation forecasts are to be realized, what will be the source of growth? Note: If the government is even slightly serious about reaching 17.5% inflation in 2025, woe to the workers!"

'THERE ISN'T EVEN AN APOLOGY IF THE TARGET ISN'T MET'

Economist and author Mustafa Sönmez stated the following:

"Let us see how empty and hollow the MTPs are, as the AKP does, from the most burning example of inflation. Below are the inflation targets set in the MTPs and the realizations according to TURKSTAT. Do you see the deviations? Even if 2024 is expected to be 41.5%, there is a deviation of 8-9 points! But there is no apology!

The MTP is a 'letter of intent' with no sanctions whatsoever. The addressees are domestic and foreign actors. If the target is not met, there isn't even an apology. For example, the ministers are the same; Mehmet Şimşek and Cevdet Yılmaz set the 2024 inflation target at 33% last year. This year they say 41.5%, but it will even exceed 45%. They don't even turn around and apologize."

'REALITY WILL REFUTE THE MTP IN THE SHORT TERM'

Economist Hayri Kozanoğlu used the phrase, "Reality will refute the Medium-Term Program in the short term!"

'2024 DOLLAR EXCHANGE RATE EXPECTATION IS 33.22 TL'

Economist Murat Muratoğlu said the following:

The "average dollar exchange rate" expectations in the Medium-Term Program (MTP);

2024 average; 33.22 TL

2025 average; 42.00 TL

2026 average; 44.40 TL

2027 average; 46.86 TL

To our citizens who believe this, in terms of creating resources for our economy by selling the Bosphorus Bridge...