Minister Şimşek explains reason for higher year-end inflation: Agricultural frost and drought
Treasury and Finance Minister Mehmet Şimşek made statements regarding the Turkish economy at a panel held in Washington, where he traveled to attend the annual meetings of the G20, IMF, and World Bank.
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In his statement, Şimşek said they project inflation to be around 30 percent by the end of the year, noting that unprocessed food prices have risen due to agricultural frost.
Şimşek stated, "We might encounter figures slightly above our expectations for inflation this year."
Highlights from Şimşek's statements are as follows:
The program may not be going exactly as planned, but the disinflation process is proceeding within the path.
We project that inflation will be around 30 percent by the end of the year.
Growth has slowed down a bit, but we will be on a sustainable growth path.
There was significant turbulence both domestically and internationally this year, but we remained moderate in growth nonetheless.
STATEMENTS ON AGRICULTURAL FROST AND INFLATION
Inflation expectations of households and the real sector continue to remain high.
We experienced a very serious drought and an agricultural frost event. This caused unprocessed food prices to rise. There were increases three times above the averages. This also caused the decline in headline inflation to lose momentum. However, we believe this is temporary.
We might encounter figures slightly above our expectations for inflation this year.
We faced very different challenges in March, April, June, and thereafter, but we responded very quickly. Trust in institutions has increased.
We are not paving the way for households to borrow in foreign currency within the framework of macroprudential measures.
As we implement our program, the macroeconomy will improve and banks will benefit from this.