VP Yilmaz announces 3-year economic targets, maintains policy framework
Türkiye's Vice President Cevdet Yilmaz speaks during a press conference to unveil a savings measures package in Ankara, Türkiye, May 13, 2024. (Reuters Photo)
Türkiye’s Vice President Cevdet Yilmaz unveiled a new medium-term economic program outlining the country’s economic strategy for the next three years.
While the core framework of the program will remain consistent, Yilmaz emphasized that the government will continue to monitor economic developments and make necessary adjustments as needed.
“The purpose of this program is to determine macroeconomic policies and address key economic indicators, income and expenditure forecasts, budget balance, and borrowing conditions. It also includes the expenditure ceilings for public administrations,” he said.
He further explained, “The policies and reforms set to ensure economic stability and support sustainable growth will shape the roadmap for our economy over the next three years,” Yilmaz added.
The vice president said that the lira has strengthened significantly, and deposits have increased by a substantial 54%.
He emphasized that the program’s primary goals are to sustain economic growth, enhance social welfare, and ensure equitable income distribution. To achieve these objectives, the government will coordinate monetary and fiscal policies while prioritizing the fight against inflation.
In addition to these measures, Yilmaz stated that structural reforms will be implemented to boost production and exports, further strengthening the Turkish economy.
Yilmaz highlighted the goal of ensuring that economic growth benefits everyone equally, emphasizing the importance of enhancing welfare for all social segments. He stressed a focus on increasing the participation of women and young people in the economy. Yilmaz stated that the new plan aims to advance Türkiye’s development and boost its global competitiveness.
Focus areas of new economic targets
Yilmaz listed the focus areas of the new program as follows:
- Making macroeconomic and financial stability permanent
- Implementation of public finance reforms
- Improvement of research, development and capacity to innovate
- Ensuring technological transformation for the transition to the green and digital economy
- Strengthening human capital
- Activation of the labor market
- Continued improvement in the business and investment environment
- Reducing informality in the economy
Regarding economic growth, Yilmaz said, “Growth in 2023 was 5.3%. This growth reflects the recovery process after the pandemic. However, high inflation requires higher growth. In this context, growth should be 3.5% in 2024. In 2024, the growth rate is expected to be 4%. We expect 4.5% growth in 2026 and 5% in 2027.”
In addition, Yilmaz stated that the transition period for inflation has been completed, and the disinflation period has begun. As of August 2024, the cumulative consumer price index (CPI) inflation rate decreased year-on-year to 52%, indicating that the disinflation process is becoming effective. He expects this trend to continue in September and beyond.
He also pointed out that the Turkish economy has demonstrated strong growth. “Expectations from the past year have been met, demonstrating the predictability of our program. Alongside balanced growth, the current account balance has improved positively, and unemployment rates are below our targets. Positive developments in macroeconomic indicators have shifted investors’ perceptions of our country. Türkiye’s credit ratings and risk scores have decreased,” Yilmaz added.
