Türkiye announced a three-year program austerity, providing for cuts in government spending to combat inflation, which reached 70% YoYaccording to official data.
Turkish Minister of Economy Mehmet Simsek said during the presentation of the program in Ankara: “Our priority is to combat high costs. Low single-digit inflation is necessary for sustainable growth.”
The plan includes a number of budget restrictions “for the entire public sector”, some of which require legislative registration in parliament, the minister explained. For three years, the purchase or lease of any new vehicles for the public sector will be prohibited, with the exception of “obligatory needs”related to health, security and defence.
The use of imported cars in the public sector will also be stopped, the finance minister promised, and the use of public transport will be encouraged for employees. Construction or purchase of public buildings will be suspended for three years, except in cases involving the risk of earthquakes or natural disasters.
The plan also includes other budget cuts for “anticipatory costs”such as a 10% reduction in government purchases of goods and services, and a 15% reduction in investment, excluding spending in areas affected by the February 2023 earthquake.
Mehmet Simsek did not specify what the government's salary policy will be, but the number of employees in the public sector will be limited to the number of people retiring. In mid-April, Labor Minister Vedat Isihan announced a freeze on the minimum wage, which typically rises in July, a change from the previous two years. From January 1, the minimum wage was increased by 50% and reached 17,002 Turkish lira (489 euros).
Inflation hit 69.8% year-on-year in April, up from 68.5% in March, according to official data released in early May. Last week, Turkey's central bank governor Fatih Karahan suggested inflation would begin to decline in June and slightly raised his year-end forecast to 38% from 36%. The Minister of Economy confirmed the prospect of returning to single-digit inflation by the end of 2025.
Rising consumer prices and the depreciation of the Turkish lira against the dollar and euro are considered to be the reason for the defeat of Erdogan and the Justice and Development Party in municipal elections on March 31.
A group of independent Turkish economists (Enag) estimates that inflation exceeded 124% year-on-year in April, up 5 percentage points month-on-month.
More Stories
The International Criminal Court issued arrest warrants for S. Shoigu and V. Gerasimov
74-year-old British Princess Anne was hospitalized with a concussion
In Germany, a policeman died in an accident with Orban's motorcade