Finance Minister Nureddin Nebati said on Saturday that Turkey’s economy is liberal and will continue to grow sustainably after the government has taken steps to support it.
Addressing businesses in the southeastern city of Gaziantep, Nebati also said the fight against rising inflation, which hit a 24-year high of 73.5% last month , remained a top priority.
The government has launched a series of measures designed to exploit its banks and bond markets to curb soaring inflation and stabilize a falling currency.
Nebati also announced on Saturday that the government will not collect TL 239 billion ($13.96 billion) in tax revenue in 2022 as part of the fight against inflation.
Turkey meanwhile increased the tax on consumer loans as the authorities stepped up measures to bolster the national currency. The lira has fallen 23% this year amid soaring prices.
The rate of tax on banking and insurance transactions on consumer loans has been raised to 10% from 5%, according to a press release published in the Official Journal on Saturday.
The Banking Regulation and Supervision Agency (BDDK) on Thursday reduced consumer debt repayment terms while increasing the minimum monthly payment required on credit cards.
Turkey’s annual inflation rate rose at a slower than expected pace in May but still hit a 24-year high of 73.5%, fueled by soaring food and oil prices. energy.
Inflation figures for the past month showed that consumer price inflation is on a downward trend, President Recep Tayyip Erdoğan said earlier.
“We never underestimate the problems encountered by our employees in their daily lives. We are looking for ways to reduce the cost of living burden,” Erdoğan noted.
The country’s trade deficit also jumped 157 percent year-on-year in May to $10.68 billion, the Commerce Ministry said on Thursday, due to soaring energy import costs.
Last Wednesday, the Organization for Economic Co-operation and Development (OECD) upgraded Turkey’s growth and inflation forecasts for this year while warning that the global economy will pay a “high price” for the invasion of Ukraine by Russia and reduced the growth of 2022. forecast.
The Paris-based policy forum, which monitors and advises its 38 member countries, raised its growth forecast for Turkey in 2022 from 3.3% to 3.7%. The expectation for 2023, meanwhile, has been reduced from 3.9% to 3%.
Stating that supportive monetary policy, coupled with high commodity and food prices, will keep consumer inflation above 70% in Turkey throughout this year, the OECD revised sharply to the rise in its average inflation expectations. As a result, the average consumer price forecast for this year has been increased from 23.9% to 72.0% and the forecast for 2023 has been increased from 21.7% to 38.9%.