Economy in Turkey: Finance Minister Şimşek says “We Are Seeing Solid Results, but Our Priority Is Single-Digit Inflation”
“We are successfully implementing the economic stability and reform program we announced in September. We are starting to see strong results,” said Minister Mehmet Şimşek. He emphasized following as well; “We are seeing concrete results, but our top priority is to bring inflation, which is causing the most distress to our citizens, back down to single digits. We have taken all necessary measures and are implementing them decisively.”
Treasury and Finance Minister Mehmet Şimşek spoke at the Ziraat Bank Agricultural Ecosystem Meeting, themed “Sustainable Agriculture and Branding in Agriculture,” attended by President Recep Tayyip Erdoğan.
Referring to the cost-saving measures implemented in the public sector, Şimşek stated, “If you look at the savings measures put into effect in the last week, we have clearly prioritized agriculture there as well. Because we want to reduce inflation with supply-side measures.”
“WE HAVE GREAT POTENTIAL IN AGRICULTURE”
In his speech highlighting the importance given to the agricultural sector, Şimşek said, “We strongly support the agricultural sector, where we rank first in value-added in Europe and in the top 10 in the world. If you look at the 2024 budget, we will provide 520 billion lira for agricultural support programs, agricultural sector investments as credit subsidies, agricultural kit financing, export supports, and tax support for feed and fertilizer. This 530 billion lira is about 1.3% of the 2024 gross domestic product. This is a very strong support because increasing food supply is our biggest priority in the fight against inflation. We provide financing support to our farmers through Ziraat Bank Agricultural Credit Cooperatives and Ziraat Participation Bank as the Treasury. We cover 70% of the interest required for all these loans, that is, 70 lira of every 100 lira interest, as the Treasury. Therefore, we provide very strong financing support. If we look at the last 20 years, the number of farmers benefiting from this financing support has increased approximately 6.5 times, while the loan facility provided has increased more than 38 times. No other sector receives such extensive credit support. This shows the importance we give to the agricultural sector. We have great potential in agriculture. We will continue to allocate more resources to agricultural irrigation, land consolidation, greenhouse cultivation, and strategic agricultural products to realize this potential.”
COST-SAVING MEASURES
Discussing the cost-saving measures implemented in the public sector, Şimşek said, “If you look at the savings measures put into effect in the last week, we have clearly prioritized agriculture there as well. Because we want to reduce inflation with supply-side measures. Esteemed President, we are successfully implementing the economic stability and reform program we announced last September. We are starting to see strong results. The access to financing for our banks has increased significantly and on very favorable terms. Our Central Bank’s reserves have improved by over 40 billion dollars in the last one and a half months as political uncertainty has decreased. Therefore, we are seeing concrete results, but our top priority is to bring inflation, which is causing the most distress to our citizens, back down to single digits. We have taken all necessary measures and are implementing them decisively.”
“INFLATION WILL PEAK IN MAY DUE TO BASE EFFECT”
Şimşek noted that the inflation rate would peak in May due to the base effect and then begin to decline. He said, “Dear President, inflation will peak in May due to the base effect. But we foresee a very rapid decline in the following months. Price stability is a prerequisite for sustainable high growth. With this reality in mind, we will continue to implement our program decisively and patiently with your strong support. With God’s permission, we will achieve good results,” he concluded.
