New Medium-Term Program Evaluation from Prof. Dr. Selva Demiralp

Economist Prof. Dr. Selva Demiralp examined the figures of the new Medium-Term Program, pointing out that while growth is sacrificed to a limited extent, pushing forward inflation targets makes the disinflation process difficult, and stated that growth is a red line of politics.

Growth and Inflation Targets in the New MTP

While growth forecasts were revised downwards in the new Medium-Term Program, it was observed that the increase in inflation targets is much more pronounced.

It was emphasized that growth has become a policy preference rather than a mere forecast within the scope of the program, which demonstrates the priorities.

Growth as the Red Line of Politics

Prof. Dr. Selva Demiralp stated that growth carries the character of a red line that politics avoids touching.

It was expressed that achieving rapid disinflation without sacrificing growth is difficult in an environment with a weakened Central Bank credibility and the absence of strong institutional structures.

Unemployment Expectations and Election Calendar

The preservation of unemployment forecasts to a large extent was associated with the elections expected to be held by 2028 at the latest.

It was stated that the government does not want to foresee a significant deterioration in the growth and employment outlook.

Transition Date to Single-Digit Inflation

The target for transitioning to single-digit inflation, which was projected for 2027 in the previous program, was postponed to 2029 with the new MTP.

It was evaluated that while the new path draws a more realistic picture compared to the previous one, the 2027 forecast remains ambitious.

Current Account Deficit and Exchange Rate Expectations

While the current account deficit forecast for 2026 was raised in the new MTP, calculations regarding the average dollar exchange rate were made based on the forecasts in the program.

Attention was drawn to the fact that high inflation erodes real wages and purchasing power.