Türkiye set to unveil savings plan amidst inflation battle

This initiative comes as the government intensifies efforts to rein in nonessential public spending amidst a persistent inflationary environment.

Speaking at an event in Istanbul, Treasury and Finance Minister Mehmet Şimşek underscored Ankara's commitment to driving down inflation to single digits, which currently stands at nearly 70%. He emphasized the imminent announcement of the savings package, stressing the necessity for prudent resource management within fiscal constraints.

"We pursue an economy of efficiency; we seek savings," Şimşek affirmed during a live broadcast, highlighting the imperative of bolstering economic stability.

Last month, President Recep Tayyip Erdoğan hinted at forthcoming measures aimed at enhancing public savings as part of broader economic reforms. Vice President Cevdet Yılmaz outlined plans to establish a monitoring system to ensure the effective implementation of these measures, encompassing various aspects from vehicle usage to the utilization of public buildings.

The savings plan is expected to entail a slowdown in certain early-phase infrastructure projects and a halt on new ones unless deemed essential for the next three years.

Minister Şimşek also stressed the importance of enhancing competitiveness and efficiency to capture a larger share of global markets, emphasizing the ineffectiveness of past measures such as currency and interest subsidies.

Additionally, he expressed confidence in Türkiye's improving credit rating following a recent upgrade by rating agency S&P, attributing it to enhanced policy coordination and external rebalancing.

The government's medium-term economic program was hailed as effective, with no issues reported in accessing global finance. Minister Şimşek reassured that income tax would not be raised, reaffirming the primary goal of reducing inflation to single digits.

Recent data showed a decline in Türkiye's unemployment rate to 8.6% in March, returning to levels last seen in October 2023, while industrial production registered a marginal decline in March on a month-over-month basis but recorded a 4.3% increase year-over-year.

With inflation expected to peak this month, Türkiye remains focused on implementing measures to combat rising prices and foster economic stability in the long term. (ILKHA)