Erdogan committed to reducing inflation to 20% before the year's conclusion
In a series of recent statements, President Recep Tayyip Erdogan has outlined ambitious economic goals for Turkey, pledging to bring inflation down to 20 percent by the end of the year and aiming to raise exports to distant countries to $50 billion by 2028.
The president's ambitious targets seem to be bearing fruit. According to Erdogan, the number of Turkish companies exceeding $100 million in exports reached 302, and Turkey's share of global exports rose to 1.07 percent. Furthermore, the president expects to see inflation in the 20s by the end of the year, following a year of uninterrupted decline.
These economic improvements come amidst a challenging global environment and economic headwinds. The Turkish central bank has implemented tight monetary policies, which, coupled with a cooling of prices month-on-month, have contributed to a decrease in inflation. In May, Turkey's inflation rate showed signs of easing, reaching 35.41 percent, the lowest since November 2021. The bank forecasts that inflation will drop to 24 percent by the end of 2025.
However, despite these positive trends, inflation remains significantly elevated by international standards. Key price increases in sectors such as education, housing, and food remain substantial, indicating ongoing challenges.
To address these challenges, Erdogan has emphasised the need to increase the geographical diversity of Turkey's exports and to support exporters through trade and tax agreements, as well as financial diversification. The president also acknowledged that Turkey did not come to these days by walking in a rose garden without thorns, suggesting that navigating through the current economic landscape will take time.
In addition, Erdogan claimed that Turkey's reliance on external financing has diminished, minimising vulnerabilities. The president also stated that 2024 was a record year for Turkish exports.
Turkey is preparing for every scenario, according to the president, as it continues to strive towards its economic goals. The gradual decline in inflation suggests some effectiveness of the measures being implemented, although the inflation rate remains high by international standards. Continued monetary tightening and economic measures are expected to further ease inflation throughout 2025.
The president's focus on trade diversification and financial diversification indicates a strategic approach in the business sector to boost exports and reduce Turkey's reliance on external financing. Moreover, the president's aim to increase the geographical diversity of Turkey's exports and support exporters through trade and tax agreements is reflective of a broader financial strategy for the business domain.
