Şimşek answered questions about the developments in the economy in a program he attended.
Stating that they have built an economic program with a strong political basis and aim to increase predictability, Şimşek said, "The essence of the Medium Term Program (MTP) is disinflation. In other words, reducing inflation to single digits and saving our nation from the cost of living." he said.
Şimşek pointed out that they offered a 3-year perspective with the program and envisaged a one-year transition period and said, "Türkiye has its own conditions. Until May last year, monetary policy was not very functional. We envisaged a process that will make this functional. The side effects of sudden shock treatments can be great." "We took into account the structure of the banking sector and the balance sheets of the real sector. All of the work was carried out with sensitivity. Those who have not read this program are making judgments." he said.
Explaining that they are making calculations to reduce inflation to single digits again and then to low single digits, Şimşek said, "The essence of the program is normalization in monetary policy. We have started to implement a monetary policy that will strengthen and support the Turkish lira, provide positive returns, slow down credit expansion, and anchor inflation expectations. At the Central Bank "We have very valuable friends with their knowledge and experience. Those who pump up pessimism and try to create uncertainty and anxiety in the market cannot pass through the doors of the institutions where these friends work." made his assessment.
Şimşek said that the Central Bank has extremely free hands and will do whatever is necessary to reduce inflation. Explaining that the effects of last year's earthquakes continue, construction inputs and labor costs increase, and rents increase with the decrease in building stock, Şimşek pointed out that the earthquake and election effects on inflation will be removed from the system this year. Stating that inflation will decrease this year if one-time effects are excluded, Şimşek said, "Why will inflation decrease? Because monetary policy has tightened and will tighten. Incomes policy will be determined in line with this. Inflation will start to decrease as of July 3. Because the output gap turns negative in July according to our prediction. Money "policy will have a delayed effect. Fiscal policy will have a faster effect." he said.
"We will do whatever is necessary to reduce inflation"
Emphasizing that no new inflationary taxes will be introduced, and that they will not increase the general rate of value added tax, corporate tax and income tax, Şimşek said, "We are very clear on this issue. But we will review the exceptions, exemptions and discount rates." he said. Şimşek stated that they will do whatever is necessary to reduce inflation through fiscal policy.
Şimşek also responded to the opposition's criticisms regarding the economic program and continued his words as follows:
"Those who ask where the program is, should read the program. If they have suggestions, let them bring them. This is the problem of the opposition. None of them contribute. In the OVP, there is a tight monetary, fiscal and income policy and structural transformation. There is a digital and green transformation. There are hundreds of actions that will improve the investment environment. "The basis of our program is solid. The basis is political stability. Our President has embraced the program."
Evaluating the credit policy, Şimşek said, "We will direct resources to productive areas, investment, employment and exports, not to consumption. We will do this with a credit policy. We will be interventionist. In the credit policy, we will ensure that the resources go to supply-side production, not to consumption. We will take additional measures if necessary for this." said.
"Do not trust the directions"
Şimşek stated that they respect the citizens' portfolio preferences and that these preferences are determined by macroeconomic conditions.
Stating that they will make the Turkish lira attractive, Şimşek said, "As the TL becomes attractive and the disinflation program is implemented, we said that we envisage a dissolution in exchange rate protected deposits (KKM) and dollar accounts. This will be gradual and to the extent market conditions allow. Last year, in August, KKM reached its peak. Approximately 3. .4 trillion lira, decreased by 1.1 trillion lira today. There is a decrease of nearly 1 in 3. There has been an uninterrupted decrease in KKM for 29 weeks. Currently, the share of TL deposits in total deposits has reached 42 percent. KKM in dollar terms is approximately 141 "It went down from one billion dollars to around 75 billion dollars. Our program works." made his assessment.
Şimşek pointed out that Türkiye's risk premium has decreased, and that there has been an exit from the KKM, the current account deficit has narrowed, growth has been rebalanced and the country's credit rating has increased.
Pointing out that there have been speculative referrals recently, Şimşek continued his words as follows:
"I think it would be in the interest of citizens not to give credence to speculative guidance. Currently, there is a group of people who sit back and direct investments in non-productive areas wherever they have two cents. There are also people who do this for political reasons or they really think so. Depending on the thoughts, evaluations and comments of the nation "We respect their criticism. However, we clearly see the orientation towards a portfolio that does not have a macroeconomic basis. We think that this is done for political purposes on the eve of the election."
Comments
No comment yet.