A top Turkish economy official highlighted on Saturday the progress, results and success in the economic program the government is implementing, citing inflation being at the lowest level in 50 months.
"If we are currently facing the lowest inflation in the past 50 months, this is progress," Treasury and Finance Minister Mehmet Şimşek told an event in Istanbul.
Annual inflation in Türkiye cooled to 30.65% in January, marking the lowest since late 2021 while month-over-month prices advanced 4.84%, according to official data.
Speaking at the summit organized in Istanbul by Nasıl Bir Ekonomi newspaper, Şimşek shared updates on the disinflation program the authorities have been implementing and pointed out that uncertainties in the global economy have now become the "new normal" as the geopolitical tensions and conflicts have become widespread.
He also cited advancements in artificial intelligence, suggesting that AI and related technologies "will affect almost all areas very rapidly and may have an impact 10 to 100 times faster and broader than previous disruptive technologies."
However, Şimşek noted that Türkiye is relatively better prepared for geopolitical and geoeconomic fractures and rising protectionism in trade, as nearly two-thirds of its exports go to countries with free trade agreements, and 80%-85% go either to those countries or to nearby regions such as Central Asia, the Middle East, North Africa and the Balkans, where Türkiye has strong ties.
He also emphasized the importance of Türkiye’s transportation corridors and the Middle Corridor, stating that new investments are being made in connectivity through the Development Road Project and that work is ongoing on next-generation trade agreements.
"One of our most critical agenda items right now is next-generation trade agreements that will also include public procurement, services and agriculture," he said.
Moreover, he suggested that Türkiye posted a $63.5 billion surplus in services trade last year, as he highlighted achievements in sectors such as tourism, health and education.
On inflation, Şimşek recalled that it peaked at 85% in October 2022 and ended that year around 64% to 65%, whereas it now stands around 31%.
"Our target range is 15% to 21%, (as) set by our central bank," he added.
"The market sees 12-month-ahead inflation at 21% to 22%. This is progress. We are not perfectionists, and we do not want perfectionism to obstruct progress. There is progress, there are results, there is success. If we are currently facing the lowest inflation in the past 50 months, this is progress," he outlined.
At the same time, he drew attention to financing costs, arguing that they will decline alongside the disinflation program.
"Access to financing will increase. Türkiye will continue to make leaps in production, exports and growth," he added.
Moreover, reflecting on prices, he said: "Unfortunately, in February, we are also seeing price increases due to Ramadan. While the whole world lowers prices during holidays and special periods, prices rise in Türkiye. This is something worth reflecting on."
"Since Ramadan fell in March last year, it seems they started increases in January this year and continued in February. But these are not important. Do you know why? Because we will compensate for this in the coming months," he said.
He similarly said that high rainfall levels in January and February would lead to a productive year in agriculture and food, dismissing the claims that the disinflation process has stalled.
"Just because monthly inflation in January and February was high due to food, to claim that disinflation has stopped and the program is no longer working — I wish those friends good luck," he noted, referring to claims and analysts' assesments on recent inflation data.
"We believe we will see a very different picture in three to five months," he affirmed.
