President Recep Tayyip Erdoğan said on Wednesday that Türkiye remains determined to implement the medium term program (MTP) and 12th development plan while highlighting the expectations for a downfall in inflation in the second half of the year.
“Without compromising growth, we are increasing employment and exports, improving our current account deficit, and strengthening our structure with investment and production,” the president said at a Ramadan fast-breaking dinner in Ankara.
“Hopefully, we will all witness a decline in inflation starting from the second half of the year,” he noted.
“As a matter of fact, the data announced by TurkStat (Turkish Statistical Institute) today showed that monthly inflation decreased in March,” he added, referring to the data from the country’s statistical authority, which showed earlier on Wednesday that the rise in monthly inflation slowed, as it was at a lower level last month compared to January and February.
“The decrease in inflation will ensure a sustainable increase in welfare by preventing the erosion of wage increases,” Erdoğan noted.
Türkiye’s annual inflation rate was 68.5% in March, up from 67.07% in February, official figures showed, depicting that price increases still gathered momentum which proved to be among the key challenges that likely impacted the outcome of nationwide local elections on Sunday.
Erdoğan’s ruling Justice and Development Party (AK Party), which won last year’s presidential and parliamentary elections, took about 35.49% of the nationwide vote. The main opposition, the Republican People’s Party (CHP), secured 37.77%.
Shortly after the inflation data release, Treasury and Finance Minister Mehmet Şimşek said recent monetary and fiscal tightening would help anchor inflation expectations and support disinflation, pledging to do “whatever it takes to achieve our primary priority of price stability.”
Both the government and analysts say inflation is likely to continue rising through mid-year before entering a steep downward trend in the second half.
Türkiye unveiled its new medium-term program covering the 2024-2026 period last September with the aim of lowering inflation and promoting high-value-added production while ensuring sustainable growth, in addition to strengthening macroeconomic and financial stability and fiscal discipline.
Along with Erdoğan, the top economy officials earlier this week pledged to continue on the path of implementation of the program to bring the desired results.
“As we leave the local elections behind, our commitment to achieving and sustaining macroeconomic stability is stronger than ever,” Şimşek said Monday evening.
Vice President Cevdet Yılmaz also signaled on Monday that the belt-tightening program would continue.
According to Yılmaz, the program will help Türkiye take inflation under control, and the public will begin to see the results in the second half of this year.
“We will prevent the gradual erosion of wage increases and ensure permanent welfare growth,” he noted. “While making structural reforms in the economy, we will focus on improving the efficiency of public administration, raising our democratic standards and establishing a more effective functioning justice system. Our aim is to grow within democratic stability and fairly reflect the benefits of growth to all segments,” he added.
In his first speech after the vote, the president said current economic policies will yield positive results. He said the outcome marks a “turning point,” and people delivered a “message” that the AK Party will “analyze” by engaging in “courageous” self-criticism.
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