President Recep Tayyip Erdogan on Sunday reiterated his government’s determination to tame inflation which he said would fall to “reasonable” levels. of February next year.
Turkey’s annual inflation rate rises to 80% in August 24 is a new year high, mainly driven by skyrocketing food and energy prices, which jumped after Russia’s invasion of Ukraine.
However, the increase turned out to be smaller than in Past months, suggesting that price The pressure may slow down.
“we will reduce Inflation to reasonable levels in February, and then we are determined to achieve down to number one event attended by businessmen in Istanbul.
“We did it in The past. we had reduced Interest rates to 4.6% and inflation to 6.2%.”
The government says Inflation will go down with Economic program Prioritize low interest rates to boost exports, production and investment with the aim of reducing the increase in Consumer Prices by Turkish Chronic Flipping current Account deficit into a surplus.
“The goal of Turkish economic model It was to develop our country through investment, employment and current Account surplus. those who criticize our country for of Economic model They got to the same line as us Erdogan said.
“Turkey is no longer the old Turkey. it turns out out That inflation and interest rate and exchange rate imposed balance for It was years of number use. “
Erdogan is well known for opposition higher Borrowing costs, which is says It just makes the rich richer and the poor poorer. High interest rates are often called “mother of all evil.”
Higher interest rates make it more expensive for Families and businesses to borrow money. Until now government He sought to boost production, exports, and employment with low prices policy.
Erdogan last The week said inflation was not an “insurmountable economic threat,” adding that it would begin to finally fall of The year.
Turkey is almost completely dependent on imports to cover its energy needs, leaving it vulnerable rising Costs that have risen dramatically after Russia invasion of Ukraine and local demand since the epidemic.
to me help families adapt with rising Costs, Turkey in 2021 Introduced fuel, electricity and gas subsidies. The amount of The government Erdogan said the subsidies amounted to nearly 500,000 billion Turkish liras ($27.1 billion). on Sunday.
The government Sees inflation dropping to 65% by the end of The year And 24.9% at the end of 2023.
central bank of Republic of Turkey (CBRT) last raise her month yearInflation expectations eventually reach 60.4% and have peaked near 90%. in The autumn.
Center bank Surprised the markets again on Thursday also eased cash policy Well by lowering its standard policy rate for The second consecutive month.
He pointed to the continuation of indicators of economic slowdown in Third quarter Because she lowered her one- repo week rate to 12% from 13%.
since the cut in middle August bank was taken steps Which aims to address the widening gap between bank’s policy rate and lending rates. One move Banks were required to hold bonds for loans with Interest rates are above a certain level.
Erdogan on Sunday also Call on Entrepreneurs to make investments with Low interest rate.
