Inflation and Medium-Term Program Assessment from Treasury and Finance Minister Şimşek

Treasury and Finance Minister Mehmet Şimşek shared the targets of the Medium-Term Program, the disinflation process, and the effects of external factors in detail during a joint live broadcast.

Medium-Term Program and Disinflation

Treasury and Finance Minister Mehmet Şimşek stated that the MTP has two main functions: being binding for the public sector and serving as a roadmap for the private sector. He noted that they are resolutely maintaining the three-year policy framework.

Impact of War and Inflation Targets

Noting that their primary target is disinflation but inertia is experienced due to backward-looking indexation and external factors, Şimşek said that had there been no war, inflation would have been at least 7 points lower and the year-end could have been completed around 20-22 percent.

Budget, Growth, and Salary Increases

Conveying that they are outperforming the budget deficit-to-GDP target by projecting 3.1 percent instead of the 3.5 percent target, Minister Şimşek stated that growth is expected at the 3.3 percent level. He also emphasized that civil servant and retiree salaries will always be increased by at least the inflation rate.

Exchange Rate Policy and Real Sector Support

Stating that the ideal in exchange rate policy is a floating exchange rate regime, Şimşek noted that a flexible exchange rate can be adopted once single-digit inflation is achieved. He added that Eximbank's capital has been increased and serious subsidies are provided for agricultural loans.