Türkiye is on the path of balancing the economy and restoring trust
According to Mehr News Agency, The International Monetary Fund announced: the turn of the financial policy in Turkey has reduced the economic imbalance and restored confidence in the country, and the improvement of the market atmosphere has caused foreign and domestic investors to go towards lira assets.
This In a statement that contains the assessment of the executive board of the fund on Turkey’s economic policies, the fund stated that the central bank must ensure that the economy does not deviate from the path of reducing inflation.
This financial institution stated in its statement : Market sentiment has improved significantly and domestic and foreign investors have flocked to lira assets, while low commodity prices, booming exports and declining gold imports have bolstered the current account and supported a significant improvement in the gross and net reserves position.
Since last year, Turkey has implemented a strict monetary and fiscal policy to resolve some of its key imbalances, including the current account deficit and foreign exchange reserves and curb inflation. The fund announced in its statement that the decisive change in economic policies last year strengthened Turkey’s overall policy position and the country’s central bank, while reducing regulatory complexity, brought the previous real policy rate into positive territory.
The Central Bank of Turkey increased its key rate by 4,150 points since last June to curb high inflation. The annual inflation rate decreased to 49.4% last month from nearly 52% in August compared to 75.45% in May. Apart from the Turkish central bank raising rates from 8.5% to 50%, the government increased taxes and some expenses to raise revenue while implementing fiscal measures to balance risks in the economy.
Inflation on track to decline further
The International Monetary Fund said that under a “gradual policy adjustment”, inflation is expected to decline further, with contractionary real policy rates, moderate wage growth and contractionary fiscal policy. More in 2025, reduce inflation to 43% this year and to 24% by the end of next year.
This statement also states that the reduction of inflation and improvement of confidence, from the reduction of the account deficit to about 2% of GDP and a reduction in the reserve deficit to around 100% of the IMF’s adequacy criteria are supported. The fund expects Turkey’s economy to grow by 3 percent this year and 2.7 percent next year, while it has improved the country’s economic growth rate to 4 percent in the medium term.
International Monetary Fund He called for the continuation of tight and data-driven monetary policies in Turkey until the inflation rate reaches the set target. The Central Bank of Turkey has kept the interest rate unchanged since March, and according to recent polls, it is expected to keep the current rate unchanged at the upcoming meeting on Thursday.
