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President Recep Tayyip Erdoğan on Monday said Türkiye’s economy continued to improve despite global challenges and intense uncertainty over wars in the Middle East and Europe, while also stressing the ground covered in the battle with inflation. "The improvement in the basic indicators of our economy continues uninterruptedly despite all the uncertainties in the global economy, escalating conflicts and tensions in our region, and the pessimistic scenarios drawn about the future," Erdoğan told a news conference following a Cabinet meeting. As part of a broader policy shift mainly to tackle inflation, Turkish authorities have pursued tight monetary and fiscal policy since June 2023.
The central bank has since raised rates by 4,150 basis points, while the government adopted tax and savings measures meant to rebalance the economy and leave behind a steep currency depreciation and price rises. Tight policy, fiscal measures and base effects brought annual inflation down to 49.38% in September from a recent peak of 75.
45% in May. The government forecasts that inflation will fall to 41.5% in 2024 and 17.
5% next year. The country's central bank sees it dropping to 38% at the end of this year. The central bank held rates unchanged in October for the seventh straight month and warned a bump in recent inflation data lifted uncertainty, a hawkish signal that could reinforce views that policy easing will not begin until next year.
"There is a visible increase in every sphere, from the reserves of the central bank to exports, from tourist numbers to employment," said Erdoğan. "Inflation, which has been a headache for our country along with the entire world including Europe and the U.S.
, has started to decline," he noted. "The bubble of exorbitant prices has already disappeared in certain sectors. It will, God willing, continue to do so.
We will definitely not tolerate those who set their sights on the halal sustenance of our citizens." Erdoğan's remarks came as Israel's relentless attacks on Gaza and Lebanon and heightened tensions with Iran have raised global concerns that a broader war could erupt in the Middle East. Officials have repeatedly doubled down on the threat posed by Israel, even warning its military operations could soon target Türkiye.
Türkiye has been fiercely critical of Israel's offensives. It has halted all trade with Israel, applied to join a genocide case against Israel at the World Court, and repeatedly called for an end to Western support of Israel along with international measures to stop its assaults. Last week's International Monetary Fund (IMF) and World Bank annual meetings were marked by new worries about an escalation of the war in the Middle East.
A wider escalation of the conflict could increase spillovers to economies in the region, IMF Managing Director Kristalina Georgieva warned last Thursday. So far, the damage has been largely limited to economies in or adjacent to the conflict: Gaza, the West Bank, Israel, Lebanon, Egypt and Jordan. The drive to cool prices is expected to lower Türkiye's gross domestic product growth to 3.
5% this year, according to the government's prediction. Its three-year policy road map sees the growth at 4% next year. The economy grew 4.
5% in 2023..
