Treasury and Finance Minister Berat Albayrak announced that the Medium Term Program (MTP) will be revealed on Sept. 20. The program will outline the government's three-year plan to fight inflation, ensure sustainable and healthy growth and reduce the current account deficit, while emphasizing achievable macroeconomic targets. In this regard, the MTP will reinforce the confidence of global markets and investors in Turkey, the minister stressed.
According to a report by Sabah daily, Treasury and Finance Minister Albayrak said, "The MTP will include a realistic plan that appropriately identifies current problems and includes correct action plans. The plan will also highlight realistic macroeconomic goals and we will also include steps to achieve those goals."
The performance of the plan will be measurable, as it relies on the principles of transparency and accountability.
The MTP will also assign significant liabilities to all ministries to take on projects for the domestic production of intermediate goods which currently constitute a bulk of Turkey's imports. This action is expected to support Turkey's export-based growth strategy and boost domestic production.
Discussions on central bank's independence closed
Upon the Central Bank of the Republic of Turkey's (CBRT) decision to hike interest rates by 625 basis points on Thursday, Minister Albayrak strongly emphasized that the CBRT has taken the step it deems appropriate and necessary in order to mitigate inflation.
"After the last monetary policy decision of the CBRT, the discussion on the central bank's independence has been closed," Albayrak said, pointing out the surprising rate increase by the bank which resulted in a rally in the Turkish lira and Turkish assets. The minister stressed that the questions about the independence of the central bank should no longer be speculated on.
With the necessary monetary policies implemented and ongoing fiscal tightening in coordination, the minister said the inflation will start to fall in October, when a rebalancing trend will also be observed.
Minister Albayrak stressed that the banks from now on will take steps to ensure liquidity for the real sector. The banks, he added, should adopt a win-win approach in their dealings with the real economy actors and noted that the high interest rates for loans are not realistic.
Fight against inflation high on agenda
The treasury and finance minister underscored that the main item on the economy administration's agenda is to mitigate inflation. "In the upcoming period, we will continue the fight against inflation in coordination with other ministries. The primary goal is to adopt projects based on fiscal tightening and efficiency," Albayrak said.
With a view to ensure the success in the fight against inflation, the private sector, banks and nongovernmental organizations should partake in the process, the minister said, highlighting the importance of full-fledged mobilization to ensure the fall in inflation with the contribution of all actors in the economy.
Turkey's annual inflation hit 17.9 percent in August, whereas monthly inflation stood at 2.3 percent, according to a statement by the Turkish Statistical Institute (TurkStat) earlier this month.
With the aim of ensuring the success of the government's target of fiscal tightening, savings and efficiency, an office to analyze costs will be established, Minister Albayrak announced.
"We have so far ensured TL 35 billion [$5.74 billion] in revenues and savings in accordance with our budgetary balance goal. The budget deficit will be below 2 percent of the gross domestic product [GDP]," he added.