Message on 'inflation' from Mehmet Şimşek: 'Still high, but...'

Treasury and Finance Minister Mehmet Şimşek made significant statements regarding Turkey's economic policies at a conference held in Saudi Arabia focused on emerging market economies.

According to Reuters, Şimşek stated that the fight against inflation and the restoration of fiscal discipline involve challenges largely stemming from local dynamics.

Arguing that despite inflation still running high, it is on a downward trend, Minister Şimşek used the expression, "Disinflation will continue, and this is the key to further improvement in expectations."

Pointing out that the current account deficit was reduced to approximately 0.7 percent of Gross Domestic Product (GDP) last year, Şimşek said, "It may expand slightly this year, but it will remain at a manageable level."

Stating that Turkey has allocated a significant amount of resources to the post-earthquake reconstruction process, Şimşek noted that approximately 74 billion dollars have been spent in this scope over the last two years, adding, "This figure is equivalent to more than 6 percent of GDP. Therefore, the budget deficit-to-GDP ratio has been around 5 percent for the last few years, which is relatively high by Turkish standards. This year, we aim to reduce this to approximately 3 percent."

Minister Şimşek also drew attention to the fact that a strong dollar and high long-term US Treasury bond yields continue to create negative effects for emerging markets.

News Source: 12punto