Minister Şimşek admits inflation decrease will be delayed by a few months

Turkish Finance Minister Mehmet Şimşek has acknowledged that the process of disinflation, or reducing inflation, may experience a slight delay but expressed strong confidence that it will resume and succeed. Speaking at the 69th General Assembly Meeting of the Banks Association of Turkey, Şimşek reiterated the government's unwavering commitment to price stability as the cornerstone of its economic program.

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Price stability is crucial for us because our ultimate goal is sustainable high growth and a fairer distribution of this growth, meaning a fairer income distribution is our ultimate goal.

"Price stability is crucial for us because our ultimate goal is sustainable high growth and a fairer distribution of this growth, meaning a fairer income distribution is our ultimate goal," Şimşek stated. He emphasized that fiscal discipline has been maintained, even with significant earthquake-related expenditures, and that the budget balance remains strong compared to similar economies. "There is no concern regarding fiscal discipline as of today," he assured.

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There is no concern regarding fiscal discipline as of today.

Şimşek highlighted structural improvements in the current account deficit, a long-standing vulnerability for the Turkish economy. He noted that these improvements are even clearer when data excluding gold is examined. The minister stressed the critical importance of structural transformation to achieve the goals of price stability, fiscal discipline, and a sustainable current account balance, aligning with President Recep Tayyip Erdoğan's priorities of investment, employment, production, and exports.

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We will continue to provide the strongest support with the fiscal policy and structural reform leg to bring inflation down to a permanent single digit. I believe we will achieve this, even if it is delayed a little.

Addressing the global economic climate, Şimşek recognized that global shocks are the new normal. However, he reaffirmed the determination to combat inflation, stating, "We will continue to provide the strongest support with the fiscal policy and structural reform leg to bring inflation down to a permanent single digit. I believe we will achieve this, even if it is delayed a little." He explained that while shocks can cause temporary delays, the direction of the trend is what matters, and the disinflation process will continue with a few months' delay.

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What is important for us is the direction of the trend. When you look at it that way, the disinflation process will continue again with a few months' delay and get back on track.