Macroeconomic Goals and Challenges of the New Medium-Term Program

The new Medium-Term Program, which reflects the three-year planning and macroeconomic goals of the Turkish economy, has been announced. While the program draws attention with its goals of balanced growth and price stability, it contains significant question marks regarding the simultaneous achievement of growth, disinflation, and competitiveness.

Implementation and Monitoring Mechanisms

The new Medium-Term Program, which includes the three-year planning of the economic administration, has been announced to the public. Although the main goals included in the program, such as balanced growth and fiscal discipline, are generally accepted, it is emphasized that, as in previous years, the real problem arises in implementation and monitoring mechanisms rather than the goals themselves.

Industry and Capital Markets

In this year's program, policies aimed at increasing the competitiveness of the manufacturing industry and steps regarding the strengthening of regulation and supervision in capital markets have been highlighted more prominently. The consequences created by high inflation and exchange rate policy are causing serious problems in the manufacturing industry.

Labor Market and Employment

In the program's approach to the labor market, it is aimed to increase labor force participation against the problem of broad unemployment. However, if the economy cannot create enough new employment, an increase in labor force participation could further exacerbate this problem.

The Growth and Inflation Contradiction

While it is observed that the growth target for this year has been revised down to around 3.3 percent, the inflation forecast for next year has been raised to 21 percent. In an environment where growth is expected to accelerate again, how inflation will be reduced to the 20 percent level remains uncertain.

Exchange Rate Policy and Competitiveness

The average exchange rate figures calculated from GDP estimates indicate that the policy of real appreciation of the Turkish Lira will continue. On the other hand, the fact that the exchange rate remains behind inflation increases the costs of producers and weakens their competitiveness in foreign markets.