Turkish inflation slowdown expected to persist in 2025, says Minister

Turkish finance minister Mehmet Simsek announced that a significant reduction in inflation is expected to persist into 2025. He emphasized that the groundwork laid by the government will contribute to a sustainable decrease in inflation rates. Recent data indicates that the annual inflation rate fell to 47.09 percent in November, down from 48.6 percent in October and drastically reduced from a peak of 75.45 percent in May.

During his parliamentary address concerning the upcoming budget, Simsek reiterated that various factors are driving this decline in inflation. He attributed it to the delayed effects of monetary policies, efforts to curb the budget deficit, and adjustments to certain prices to align with inflation targets. Additionally, he highlighted the importance of ongoing projects and reforms aimed at increasing supply.

The minister provided further insights into the country’s economic health, mentioning that the current deficit to national income ratio has decreased from 5.5 percent to below 1 percent. As of December 6, Turkey’s gross reserves rose to $159.4 billion, while net reserves climbed to $48.3 billion. The current account deficit, initially around $56 billion, has significantly dropped to approximately $8 billion. Simsek emphasized the necessity of accelerating structural reforms to ensure that this reduction in inflation becomes a permanent trend.