Turkish Finance Minister affirms commitment to tightening fiscal policy amid inflation concerns

In a statement shared on his social media account, Minister Şimşek addressed recent economic developments, highlighting several key points:

- Fitch's decision to upgrade Türkiye's long-term foreign currency debt rating from B to B+ and to revise the outlook from negative to positive was praised as a reflection of the country's robust economic policies. The government remains dedicated to upholding sound policies and implementing structural reforms.

- Ensuring price stability remains a paramount concern for Türkiye, with efforts to rebalance growth already underway. Domestic consumption is characterized as moderate, while net exports are on the rise.

- The current account deficit is shrinking at a faster pace than anticipated and is expected to dip well below 3% of GDP this year.

- Turkish lira deposits have seen a notable increase in their share of total deposits since August, a trend expected to continue as confidence in the government's program grows.

- The restoration of price stability is emphasized as a crucial objective, with improvements expected later in the year. Income policies are anticipated to become more supportive in achieving this goal.

The government is committed to reducing the fiscal deficit, including expenditures related to earthquakes, to below 3% of GDP next year. Minister Şimşek underscored the importance of recognizing that achieving price stability will require time.

Following the local elections this month, Türkiye will enter a prolonged period without elections, allowing for the continuation of its medium-term program. This program includes reforms aimed at enhancing productivity and competitiveness.

Regarding recent volatility in the foreign exchange market, Minister Şimşek urged that it be viewed as temporary. The Central Bank of the Republic of Türkiye (CBRT) remains steadfast in its commitment to stabilizing inflation expectations through the use of all available tools.

In summary, Minister Şimşek expressed satisfaction with the progress of the program announced in September, noting that it is yielding results as anticipated. (ILKHA)