Vice President Cevdet Y\u0131lmaz reassured on Wednesday that Turkey is not facing the risk of a \u201chard landing,\u201d even as the country anticipates a slight slowdown in growth due to ongoing disinflationary measures. Speaking to the business daily EKONOMI, Y\u0131lmaz emphasized that while consumption is expected to moderate as part of efforts to control inflation, Turkey\u2019s economic trajectory remains stable.<\/p>\n
Y\u0131lmaz highlighted the government\u2019s dual focus on curbing inflation while maintaining economic growth. He stated that although there might be some reduction in the growth rate, Turkey will not experience negative growth. \u201cThere may be partial declines in the growth rate, but we will certainly not move into negative territory,\u201d Y\u0131lmaz said, underscoring the government\u2019s confidence in the economic outlook.<\/p>\n
T\u00fcrkiye has been battling high inflation, a problem aggravated by global supply chain disruptions and fluctuating energy prices. The Central Bank of the Republic of Turkey (CBRT) has responded with aggressive monetary tightening, raising its benchmark policy rate by 4,150 basis points since June of the previous year. The rate has remained unchanged at 50% since March to allow the effects of the tightening to manifest.<\/p>\n
Y\u0131lmaz pointed out that the reduction in inflation has been partly driven by the \u201cbase effect,\u201d a statistical phenomenon where inflation appears lower when compared to previous high levels. However, he cautioned that the base effect alone is insufficient to control inflation, stressing the importance of the government\u2019s broader economic strategies aimed at reducing demand.<\/p>\n
The vice president also addressed concerns about Turkey\u2019s economic growth potentially stalling. He stated that while consumption has moderated, this aligns with the government\u2019s disinflationary growth strategy, which seeks to stimulate production, investment, and exports. \u201cThis approach aligns with a disinflationary growth strategy,\u201d Y\u0131lmaz explained, noting that the current policies are designed to reduce demand without harming growth.<\/p>\n
Y\u0131lmaz also touched on the ongoing debate about Turkey potentially being trapped in a \u201cmiddle-income trap,\u201d where economic growth stagnates after reaching middle-income status. He argued that Turkey\u2019s path to escaping this trap lies not in low wages, but in boosting technological capabilities.<\/p>\n
Looking ahead, Y\u0131lmaz indicated that the government plans to update its medium-term economic program in the coming days while maintaining its core policy framework. He reiterated that inflation is expected to decline steadily, with projections suggesting it could fall to the low 50s in August and below 50% in September, barring any unforeseen global events.<\/p>\n
On the subject of potential interest rate cuts, Y\u0131lmaz deferred to the CBRT, noting that decisions on this matter fall within the central bank\u2019s jurisdiction. He reiterated the government\u2019s goal of achieving single-digit inflation by 2026, recognizing the challenges posed by external economic factors such as currency depreciation and rising external debt.<\/p>\n","protected":false},"excerpt":{"rendered":"
Vice President Cevdet Y\u0131lmaz expressed confidence in Turkey\u2019s economic resilience, asserting that while growth may slow slightly, the country is not at risk of a hard landing. The government remains committed to balancing inflation control with continued economic expansion.<\/p>\n","protected":false},"author":411,"featured_media":31814,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[45],"tags":[18162,18161,18163,5673,14537,7845,18164,18160],"class_list":["post-31801","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-turkey","tag-central-bank-of-the-republic-of-turkiye","tag-cevdet-yilmaz","tag-disinflationary-growth-strategy","tag-foreign-investment","tag-inflation-control","tag-interest-rates","tag-middle-income-trap","tag-turkiye-economy"],"reading_time":"3 min read","_links":{"self":[{"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/posts\/31801","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/users\/411"}],"replies":[{"embeddable":true,"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/comments?post=31801"}],"version-history":[{"count":0,"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/posts\/31801\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/media\/31814"}],"wp:attachment":[{"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/media?parent=31801"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/categories?post=31801"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/tags?post=31801"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}