Vice President Cevdet Yılmaz on Monday reiterated the government’s optimism, forecasting a significant easing of inflation by the middle of next year.
"By the middle to late autumn of next year, we will largely no longer be discussing inflation," Yılmaz told a meeting with the business community in southwestern Denizli province.
Tight monetary policy, fiscal measures and base effects brought annual inflation down to 48.58% in October from a peak of 75.45% in May.
The country's central bank earlier this month raised its year-end inflation forecasts for this year and next to 44% and 21%, respectively. It previously forecast year-end inflation of 38% in 2024 and 14% next year.
The government anticipates end-2024 and end-2025 inflation of 41.5% and 17.5%, respectively.
Stressing that inflation has already shown signs of moderation, Yılmaz noted a 27-point decline over the past four months.
“We expect this downward trend to continue in the period ahead,” he added.
Reducing inflation is critical not only for economic growth but also for social well-being, said the vice president.
Yılmaz underscored that there is no contradiction between growth and inflation in the medium and long term, emphasizing that historically, Türkiye’s periods of lowest inflation have coincided with the highest growth rates.
The Turkish economy grew by 3.8% in the first half of this year, and the government projects growth of approximately 4% in 2025, with further acceleration to 4.5% and 5% in 2026 and 2027, respectively.
By the end of the year, Türkiye’s gross domestic product (GDP) is expected to surpass $1.3 trillion, while exports are projected to reach $264 billion, said Yılmaz.
Highlighting the country’s fiscal resilience, Yılmaz noted that Türkiye had managed to maintain a budget deficit-to-GDP ratio of 5.2% in 2023 despite vast spending to rebuild the country’s southeastern region struck by devastating earthquakes.
The ratio is expected to improve to 4.9% this year and further decline in the coming years.
Looking ahead, Yılmaz said the government anticipates a budget deficit of around 3% in 2025, with plans to reduce it below that threshold in subsequent years. He reaffirmed the government’s commitment to returning to historical fiscal norms, even amid temporary pressures such as earthquake recovery expenditures.
